Does digital literacy reduce intergenerational income dependency?

• Published in: International review of financial analysis 2024-10, Vol.95, p.103389, Article 103389
• Main Authors: Wang, Haijun, Ge, Chen, Du, Xiance, Feng, Yiqiang, Wang, Weicheng
• Format: Article
• Language: English
• Subjects: Digital literacy; Intergenerational income dependence; Occupational mobility; Social networks
• ISSN: 1057-5219
• DOI: 10.1016/j.irfa.2024.103389

Smoothing upward mobility channels and reducing intergenerational income dependence are important prerequisites for realizing the sustainable development of all humankind. Starting from the impact of digital economy on micro individuals, this paper explores the mechanisms of digital literacy on families' dependence on intergenerational income. The paper revealed the following findings: First, the improvement of children's digital literacy can significantly enhance the income flow between children and their parents, as well as reduce the former's income dependence on the latter. Specifically, for every 1 unit increase in children's digital literacy, children's income dependence on their parents decreases by 0.035. Among the sub-indicators of digital literacy, social skills and digital attitudes have the highest contribution to reducing intergenerational income dependence. Second, social networks, occupational mobility, and asset allocation capabilities play a moderating role in how digital literacy affects intergenerational income dependence. The more developed the social network, the greater the occupational mobility, and the stronger the asset allocation ability, the more significant the inhibition effect of digital literacy on intergenerational income dependence. Third, the effect of digital literacy on intergenerational income dependence, which is more pronounced in rural areas, inland areas, and male groups. •Smoothing upward mobility channels and reducing intergenerational income dependence are important prerequisites for realizing the sustainable development of all humankind. This paper explores the mechanisms of digital literacy on families' dependence on intergenerational income.•The improvement of children's digital literacy can significantly enhance the income flow between children and their parents, as well as reduce the former's income dependence on the latter.•Social networks, occupational mobility, and asset allocation capabilities play a moderating role in how digital literacy affects intergenerational income dependence. The more developed the social network, the greater the occupational mobility.•The impact of digital literacy on intergenerational income dependence is more pronounced in rural and inland areas.