Intergenerational income mobility in Brazil: an analysis on its evolution over the past 20 years

Abstract

This paper investigates trends in intergenerational income mobility in Brazil over the 2000s, when we observed a fall on labor income inequality; and the role of education in this process. Regressions were estimated using two sample instrumental variable to measure the relationship between fathers’ and sons’ income. Intergenerational elasticity of labor income has dropped from around 0.65 to 0.77 in 1996 to around 0.42 to 0.53 in 2014. The indicators that eliminate income distribution effects, however, remained almost constant. Regarding the role of schooling, the relationship between parents’ income and children’s income when the years of study are controlled is stable in regressions that relate income levels, but it even increases in those that relate their positions in distribution.