On intergenerational (im)mobility in Latin America

Abstract

This paper studies intergenerational mobility in Latin America and shows that, in addition to the well-documented fact that the Latin American income distribution is highly unequal, profound differences in opportunities persist from one generation to the next. Comparing final educational achievements for 18 Latin American countries, this paper finds that measures of the persistence in educational achievements across generations, such as beta-and partial correlation coefficients, are high. This persistence is correlated with high returns to education, relatively low progressivity in public investments in education, and inequality of opportunity. An index of inequality of opportunity (including dimensions beyond an individual's control such as race, gender and parental income background) is estimated at around 40 %, which is high by international standards. The paper also explores country differences in intergenerational mobility. While in Costa Rica, circumstances explain below 15 % of the observed variance in education, in Chile, they amount to almost half the explained variance. The findings imply that there is room for targeted redistributive policies that improve intergenerational mobility.

Inequality and Mobility: Gatsby in the Americas

“…These findings build on those of Conconi et al [8] and complement those of Daude and Robano [9] who document similar patterns of mobility across Latin America using 2008 Latinobarómetro's surveys. Like Conconi et al, [8] this paper relies SEDLAC (Socio-Economic Database for Latin America and the Caribbean) household survey data standardized by CEDLAS with support from the World Bank 1 .…”

“…Conconi et al [8] cover much of the same ground as this paper, including computing a changes version of what we now know as the Gatsby curve using the same SEDLAC data IEM measures used here (they stop short of panel regressions however). Their work and similar estimates by others in this is ably reviewed in series of papers by Christain Daude [29] starting with his 2011 "Ascendance by Descendants" paper on potential drivers of increased mobility in Latin America. In a series of OECD publications, he and his colleagues acknowledge the education equalizingspreade of primary and secondary education in Latin America, but express reservations about school quality.…”

“…We refer readers to Daudeand Robano [9] and Ali Brahim et al [20] which include summaries of Solon [14] benchmark income mobility model where intergenerational income correlations are driven by the skill premium and the return on education along with public and private investment in education The OECD's Latin American Outlook 2011 combines Hertz's [30] data within inequality data from SEDLAC and social mobility measures from Latinobarómetro (2008) argueing that "societies in Latin America that are less mobile tend also to exhibit high levels of inequality" (what we now call the Gatsby correlation). While acknowledging that correlation does not imply causality Duade [29] argues "the same factors that affect intergenerational mobility (private returns to education, progressivity of public investment in education, and other transmissible factors such as abilities, race and socialnetworks) also determine the cross-sectional distribution of income in the long run. "…”

“…We find the coverage and innovation of these CCT programs is correlated with higher intergenerational mobility, as measured by school attendance. If family's can borrow to keep children in school, access to credit can also increase mobility [9].…”

Are the Children of Uneducated Farmers Doubly Doomed? Farm, Nonfarm and Intergenerational Educational Mobility in Rural China

“…al. (2001), Duncan (1996, Lillard and Willis (1994), Lam and Schoeni (1993), Daude (2011, Emran andShilpi (2011, 2012), Bossuroy and Cogneau (2013), Maitra and Sharma (2010)). …”