Breaking the links: broadband infrastructure and intergenerational income mobility

Can broadband infrastructure serve as a catalyst for breaking intergenerational income links and promoting social mobility? This paper tries to answer this question by empirically examining the effects of broadband infrastructure on intergenerational income mobility in China. We exploit a quasi-natural experiment provided by the Broadband China Strategy (BCS) and employ a staggered difference-in-differences methodology to draw causal insights, revealing a 0.058 decrease in intergenerational income elasticity in pilot cities compared to non-pilot cities. The effect is particularly pronounced for males, cohorts born in the 1980 s, those whose fathers have rural hukou or lower levels of education, and residents in peri-urban areas surrounding major cities. Mechanism analyses suggest that the increase in intergenerational income mobility is primarily due to reshaping employment opportunities in favour of disadvantaged groups. These findings hold important implications not only for China but also for other developing countries undergoing digitalization.