The Role of Per Capita GDP in Intergenerational Mobility in Education: A Cross-Country Study

This study investigates the mechanism of how per capita GDP impacts intergenerational mobility in education. We propose an analytic framework in which per capita GDP affects educational mobility through government spending on education and other channels. Following this framework, this study conducts five-round estimations to examine the connections among per capita GDP, educational mobility, and government expenditure on education, using multiple data sources. The estimations demonstrate the following findings: (1) There is a positive non-linear relationship between per capita GDP and educational mobility, with higher disparities in less developed countries. This suggests that other factors, such as social arrangements, mediate the relationship. (2) Government expenditure on education is positively associated with intergenerational mobility in education. However, the effectiveness of government expenditure on education varies, particularly in developing countries. (3) The Granger causality test indicates a relationship between per capita GDP and Government expenditure on education for a short term (2-7 years), although a bidirectional relationship emerges between these variables in the longer term of 8-12 years. Government expenditure on education is more responsive to per capita GDP in developed countries than in less developed countries. (4) Through 2SLS estimations, two paths from per capita GDP to educational mobility are identified: One through increased average schooling and another through direct policy interventions. These paths highlight the importance of both economic development and targeted educational policies in enhancing educational mobility. In addition, the study suggests that higher educational mobility can lead to economic growth, though identifying the precise causal mechanisms remains challenging.