Intergenerational Mobility in the Land of Inequality” with Paolo Pinotti

Abstract:

We provide the first estimates of intergenerational mobility for a developing country using rich data for Brazil. We link two generations, parents and children, at the individual-level and track their formal and informal income from several data sources. We uncover a higher degree of intergenerational persistence of incomes than all estimates currently available for developed countries. At the bottom of the distribution, children born from parents in the 25th percentile reach on average the 41th percentile in adulthood. We document substantial heterogeneity in absolute mobility -- and, to a lesser extent, relative mobility -- by gender, race, and geographical area. Causal place effects account for up to 65% of differences in upward mobility across areas. Parental income has also large effects on other long-term outcomes: education, entrepreneurship, mortality, and criminal behavior.