Is entrepreneurship a channel of social mobility in Latin America?

Abstract

This paper summarizes the findings in this special issue of the Latin American Journal of Economics on entrepreneurship’s role in upward social mobility in Latin America, especially for the middle class, often considered the cradle of entrepreneurship. The income-persistent coef ficients estimated with pseudo-panel data for Colombia, Ecuador, and Uruguay indicate that entrepreneurship is a channel of intergenerational mobility, while asset persistence estimates for Mexico show that entrepreneurship increases mobility across generations. Although persistence coef ficients don’t indicate the direction of such mobility, estimates of income dif ferentials between entrepreneurs and non-entrepreneurs for Ecuador and Mexico support the hypothesis that upward mobility dominates.