Intergenerational mobility: An assessment for Latin American countries

Abstract

This paper aims to study the process of intergenerational income mobility in some Latin American economies (Brazil and Panama), which have been much neglected in the relevant literature. Like other countries in the area, Brazil and Panama have a stagnant economy coupled with high income inequality. Our rich dataset allows us to provide the most reliable estimates of intergenerational mobility, after controlling for a number of additional control variables which were unavailable in previous studies. We provide estimates broken down for different genders, age groups, locations, education of fathers. Our results are robust to different specifications and suggest that previous studies significantly overrated the extent of the intergenerational mobility in the countries considered. However, our figures are still compatible with an extremely low degree of social mobility. Moreover, we show that behind social immobility there is also a sluggish process of structural change and an insufficiently progressive tax system.