Inequality of Opportunity in Mexico

Abstract

Mexico is a country with high levels of inequality and low intergenerational
 social-mobility rates for those located at the bottom extremes of the wealth
 distribution. Although such low rates suggest that at least a share of the
 observed income inequality may be due to an unequal distribution of
 opportunities, this conjecture has not been thoroughly tested in the
 literature. The present article fills this gap estimating the lower bound of
 the contribution of unequal opportunities to income and wealth inequality
 in Mexico, with an operationalization of the “ex-ante” approach to the
 measurement of inequality of opportunity. Relying on a national
 representative survey designed for the analysis of social mobility, namely,
 the ESRU Survey on Social Mobility in Mexico (2011), we are able to define
 a broad set of circumstance groups (“types”), encompassing the wealth of
 the household of origin. This available information reduces the omitted
 variable bias of previous estimations and allows for a better account of the
 role of inequality of opportunity in income inequality. Our results show that
 the lower bound of the contribution of unequal opportunities to total
 income inequality and total wealth inequality is around 30 per cent, which
 is substantially higher than previous estimations for Mexico and ranks
 among the highest values in Latin America.

Shades of social mobility: Colorism, ethnic origin and intergenerational social mobility.

“…This information is useful for constructing a latent variable through a data reduction technique, such as Multiple Correspondence Analysis (MCA) or Principal Components Analysis (PCA). This approach to capturing economic status has been used in development economics in the study of the income distribution (Filmer and Pritchett, 2001;McKenzie, 2005;Filmer and Scott, 2012;Poirier et al, 2020), inequality of opportunity (Wendelspiess-Chávez-Juárez, 2015;Vélez-Grajales et al, 2018;Monroy-Gómez-Franco et al, 2021;Plassot et al, 2022), and intergenerational social mobility (Monroy-Gómez-Franco and Vélez-Grajales, 2021;Campos-Vázquez and Medina-Cortina, 2019;Torche, 2015;Delajara et al, 2022).…”

The potential effects of the COVID-19 pandemic on learnings

“…This third scenario corresponds to one in which attenuation is performed entirely by the household and the educational and economic resources available to its members. From the literature on the inequality of opportunity in Mexico ( Vélez-Grajales, Monroy-Gómez-Franco and Yalonetzky, 2018 ; Monroy-Gómez-Franco, Vélez-Grajales and Yalonetzky, 2021; Piassot, Soloaga and Torres, 2021), we know that educational and economic resources are very unevenly distributed across Mexican households. This results in significant variability in the effective immediate learning costs when only these resources are available to attenuate the shock.…”

“…Secondly, Mexico is a country with high levels of inequality of opportunity and low social mobility ( Vélez-Grajales, Monroy-Gómez-Franco and Yalonetzky, 2018 ; Monroy-Gómez-Franco, Vélez-Grajales and Yalonetzky, 2021; Vélez-Grajales and Monroy-Gómez-Franco, 2017). A significant determinant of this structural pattern is the heightened role of private resources of origin determining the economic trajectory of a person, which arises from the low effectiveness of public systems to support the socioeconomic achievement of the majority of the Mexican population.…”

Applying the Minimum Income Standard in diverse national contexts

“…This is perhaps most evident in Mexico, where the pilot MIS project undertaken in 2016 is being developed in to a 'full-scale' MIS research programme to establish 'la vida digna' for households with children living in urban Mexico. This development is being driven by a concern over the (in)adequacy of wages and a lack of social mobility in Mexico (Velez-Grajales et al, 2018) and the need for policy to address these issues. Since 2005, the minimum wage in Mexico has not been sufficient to cover a 'minimum food basket' (Escobar Toledo, 2014) despite the view that any minimum wage in the country should meet the 'normal needs of a family head in material, social and cultural aspects' (CONASAMI, 2016).…”