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.