How strong is the transmission of socio-economic status across generations in Latin America? To answer this question, we first review the empirical literature on intergenerational mobility and inequality of opportunity for the region, summarizing results for both income and educational outcomes.
We find that, whereas the income mobility literature is hampered by a paucity of representative datasets containing linked information on parents and children, the inequality of opportunity approach—which relies on other inherited and pre-determined circumstance variables—has suffered from arbitrariness in the choice of population partitions.
Two new data-driven approaches—one aligned with the ex-ante and the other with the ex-post conception of inequality of opportunity—are introduced to address this shortcoming. They yield a set of new inequality of opportunity estimates for 27 surveys covering nine Latin American countries over various years between 1994 and 2017.
In most cases, more than half of the current generation’s inequality is inherited from the past—with a range between 44 and 63 per cent. We argue that, on balance, given the parsimony of the population partitions, these are still likely to be underestimates.