Intergenerational mobility and the rise and fall of inequality: Lessons from Latin America

Abstract

Countries with high income inequality also show a strong association between parents’ and children’s economic well-being; i.e. low intergenerational mobility. This study is the first to test this relationship in a between-country within-country setup; using harmonized micro data from 18 Latin American countries, spanning multiple cohorts. It is shown that experiencing higher income inequality in childhood is associated with lower intergenerational mobility measured in adulthood. Following the same methodology, the influence of economic growth and public education is evaluated: both are positively, significantly, and substantially associated with intergenerational mobility.

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Acknowledgments

Generous funding by the Hans-Böckler-Foundation and the Jacobs-Foundation made this project possible. Furthermore, I am particularly grateful to Giacomo Corneo for his continued support, and to Leonardo Gasparini, Jorgen Modalsli, Jan Stuhler, Friedhelm Pfeiffer, and Sarah Coyne for very helpful comments. Part of this research was carried out while visiting CEDLAS in La Plata. I am gratefully indebted to my colleagues there for their hospitality; in particular to Guillermo Cruces for fruitful discussions, and to Leopoldo Tornarolli, Pablo Gluzmann, and Joaquin Serrano for their suggestions and the great assistance provided with the SEDLAC data. Participants of conferences and seminars in Bari, Berlin, Bonn, Ghent, London, Luxembourg, Marseille, Munich, Potsdam, and Vienna are acknowledged for their comments. All remaining errors are solely mine.

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Neidhöfer, G. Intergenerational mobility and the rise and fall of inequality: Lessons from Latin America. J Econ Inequal 17, 499–520 (2019). https://doi.org/10.1007/s10888-019-09415-9

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Keywords

  • Inequality
  • Intergenerational mobility
  • Equality of opportunity
  • Human capital
  • Growth
  • Development
  • Public education
  • Great gatsby curve
  • Latin America