Intergenerational Schooling Mobility and Macro Conditions and Schooling Policies in Latin America

The effects of market and policy reforms on poverty and inequality in Latin America have been of considerable concern. The region continues to have relatively great income inequalities. But income inequality measurements based on cross-sectional annual data are Asnapshots.@ Two different societies with the same Asnapshots@ of income distribution may have different levels of social welfare because they have different degrees of social mobility. To date little attention has been paid to measuring social mobility in the region. Schooling is thought to be a major mechanism through which intergenerational social mobility is affected. This paper explores some dimensions of the strength of the association of family background with child schooling and whether the strength of this association is related to some major macro and aggregate school policy variables. First, arguments about why family background might be associated with schooling and how that association might depend on market reforms and on public schooling policies are summarized. Then the extent of child schooling gaps overall and across parental schooling quintiles and child age groups are described and the empirical associations of family background with schooling are estimated for children aged 10-21 in Latin America based on micro data from 28 household surveys from 16 countries for the 1980-1996 time period for 559 subsamples. Based on these estimates two indices of intergenerational schooling mobility are constructed and used to explore to what extent intergenerational schooling mobility is associated with basic macro economic and aggregate schooling indicators. The empirical estimates have three important implications, the first of which reinforces the existing literature and the other two of which are greater contributions because they are the first explorations of the issues of interest: (1) They are consistent with family background having significant associations with schooling gaps, though with differences across countries, across time, across parental schooling quintiles, and across child age groups. (2) They suggest that macro conditions B in particular those related to the extent of internal market development B importantly shape intergenerational schooling mobility. (3) They suggest that aggregate school policies that are directed towards increasing resources available for basic schooling in general and for improving school quality in particular have important positive impact on intergenerational schooling mobility, though other educational expenditures such as those on tertiary education may reinforce the impact of family background and reduce intergenerational social mobility. Thus, even though the immediate effects of macro market reforms and schooling policy reforms on current income distribution may not have been that strong, there may be important longer-run effects through increasing intergenerational social mobility. _______________________________________________________________ © 1998 Inter-American Development Bank 1300 New York Avenue, N.W. Washington, D.C. 20577 The views and interpretations in this document are those of the authors and should not be attributed to the Inter-American Development Bank, or to any individual acting on its behalf. The Office of the Chief Economist (OCE) also publishes the Latin American Economic Policies Newsletter, as well as working paper series and books, on diverse economic issues. Visit our Home Page at: http://www.iadb.org/oce. To obtain a complete list of OCE publications, and to read or download them, please visit our Web Site at: http://www.iadb.org/oce/32.htm