More Educated, Less Mobile? Diverging Trends in Income and Education Mobility in Chile and Peru

Abstract

We analyse intergenerational persistence in income and education in Chile and Peru for birth cohorts from the early 1950s to 1990. Both countries have seen a structural expansion of education over this period and decreasing income inequality in recent decades. We impute non-observed parental income from repeated cross-sections and estimate persistence in the range of 0.63 to 0.67 in Peru and 0.66 to 0.76 in Chile for household heads of the birth cohorts 1977–1990. The analysis of educational mobility covers household heads of birth cohorts from 1953 to 1990 and relies on retrospective information. We observe an increase in absolute mobility for younger generations, which we relate to the structural expansion of education that created room at the top. In relative terms, mobility patterns remain more stable, and parental education is still a strong predictor for own educational achievement. The relationship is non-linear in both countries: persistence among very low and highly educated groups is strong, while individuals with parents of average education levels are more mobile.
 Upward mobility is stronger in Peru than in Chile: the chances to move from no formal education to higher education across one generation are 46 per cent, the average in Peru, compared to 20 per cent in Chile. The chances of persisting in the top across generations are also slightly higher in Peru with a factor of 3 times the average compared to 2.76 in Chile.