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Intergenerational Mobility in Latin America: Deeper Markets and Better Schools Make a Difference

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Abstract:

The effects of market reforms on poverty and inequality in Latin America have been of considerable concern. The region continues to have relatively great income inequalities. But measures of income inequality based on cross-sectional annual data are "snapshots." Two different societies with the same "snapshots" of income distribution may have different levels of social welfare because they have different degrees of social mobility.

In this paper we address the question whether the reforms of the last decade, implemented in various degrees in different countries, have affected mobility across generations. We analyze the effects of macroeconomic conditions and education policies on intergenerational mobility, using data from 28 household surveys, covering 16 countries over the years 1980-1996.