Intergenerational mobility: An assessment for Latin American countries.

• This paper aims to study the process of intergenerational income mobility in some Latin American economies (Brazil and Panama), which have been much neglected in the relevant literature. • Our rich and detailed dataset (the IPUMS survey) allows us to provide the most reliable estimates of intergenerational mobility, after controlling for a number of additional control variables which were unavailable in previous studies, such as family size, literacy level of fathers, and location in rural versus urban areas. • In the present study, we can also eliminate co-residence and young adults' problems which are widely discussed in the current literature. This allows us avoiding complex and problematic methodologies to predict the incomes of parents for the non-co-residing children from the co-residing children. • A major advantage of our paper as compared to the previous literature, considering that the instrumental variables typically used for this methodology do not fully satisfy the exclusion restriction. • We show that behind social immobility there is also a sluggish process of structural change and an insufficiently progressive tax system. This paper aims to study the process of intergenerational income mobility in some Latin American economies (Brazil and Panama), which have been much neglected in the relevant literature. Like other countries in the area, Brazil and Panama have a stagnant economy coupled with high income inequality. Our rich dataset allows us to provide the most reliable estimates of intergenerational mobility, after controlling for a number of additional control variables which were unavailable in previous studies. We provide estimates broken down for different genders, age groups, locations, education of fathers. Our results are robust to different specifications and suggest that previous studies significantly overrated the extent of the intergenerational mobility in the countries considered. However, our figures are still compatible with an extremely low degree of social mobility. Moreover, we show that behind social immobility there is also a sluggish process of structural change and an insufficiently progressive tax system. [ABSTRACT FROM AUTHOR]