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Inherited Inequality in Latin America

Author

Listed:
  • Ferreira, Francisco H. G.

    (London School of Economics)

  • Brunori, Paolo

    (University of Florence)

  • Neidhofer, Guido

    (ZEW Mannheim)

  • Salas-Rojo, Pedro

    (London School of Economics)

  • Sirugue, Louis

    (London School of Economics)

Abstract

This paper argues that relative measures of intergenerational mobility and inequality of opportunity are closely related ways of quantifying the inheritability of inequality. We review both literatures for Latin America, looking both at income and educational persistence. We document very high levels of intergenerational persistence and inequality of opportunity for education, with inherited characteristics predicting 29% to 52% of the current-generation variance in years of schooling. Inherited circumstances are somewhat less predictive of educational achievement, measured through standardized test scores, accounting for 20% to 30% of their variance. Our estimates of inequality of opportunity for income acquisition suggest that between 46% to 66% of contemporary income Gini coefficients can be predicted by a relatively narrow set of inherited circumstances, making Latin America a region of high inequality inheritability by international standards. Our review also finds a very wide range of intergenerational income elasticity estimates, with substantial uncertainty driven by data challenges and methodological differences.

Suggested Citation

  • Ferreira, Francisco H. G. & Brunori, Paolo & Neidhofer, Guido & Salas-Rojo, Pedro & Sirugue, Louis, 2025. "Inherited Inequality in Latin America," IZA Discussion Papers 18254, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp18254
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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I39 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Other
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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