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 and 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 as adults. Furthermore, the influence of economic growth and public education is evaluated: both have a positive, significant, and substantial effect on intergenerational mobility.