Intergenerational Earnings Mobility in Chile: The Tale of the Upper Tail

52 Pages Posted: 19 Oct 2022 Last revised: 20 Oct 2022

See all articles by Javier Cortes-Orihuela

Javier Cortes-Orihuela

University of British Columbia (UBC) - Vancouver School of Economics

Juan Díaz

University of Chile - Department of Management Control and Information Systems

Pablo Gutierrez Cubillos

University of Chile - Department of Management Control and Information Systems

Pablo Troncoso

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics

Gabriel Villarroel

Ministry of Finance, Chile

Date Written: October 13, 2022

Abstract

This paper provides the first robust estimates of intergenerational mobility in Chile’s formal private sector using administrative data for parents and children. Using a unique dataset that links a child’s and their parent’s earnings, we estimate that the intergenerational earnings elasticity is between 0.275 and 0.312, whereas the rank- rank slope is between 0.249 and 0.268. In addition, we find significant nonlinearities in these measures, as intergenerational mobility is very high in the bottom 80% of the parents’ distribution and bottom 65% of the children’s distribution, but with remarkably high persistence in the upper part of the earnings distribution. We also document statistically significant heterogeneity by gender. Specifically, we find that the association between mothers’ and female children’s earnings is higher than for male children. In addition, persistence in poverty is higher for female children than for male children, upward mobility is higher for male children, persistence in privilege is higher for male children, and children’s intergenerational gender gap decreases as parental earnings increase. In particular, we find significant nonlinearities in the gender gap at the upper tail of fathers’ earnings distribution, suggesting that the gender dynamics of intergenerational mobility at the upper tail are different from the rest of the population.

Keywords: Intergenerational Mobility, Administrative Linked Data, Gender Heterogeneity.

JEL Classification: J31, J62

Suggested Citation

Cortes-Orihuela, Javier and Díaz, Juan and Gutierrez Cubillos, Pablo and Troncoso, Pablo and Villarroel, Gabriel, Intergenerational Earnings Mobility in Chile: The Tale of the Upper Tail (October 13, 2022). Available at SSRN: https://ssrn.com/abstract=4247304 or http://dx.doi.org/10.2139/ssrn.4247304

Javier Cortes-Orihuela

University of British Columbia (UBC) - Vancouver School of Economics ( email )

6000 Iona Dr
Vancouver, BC V6T 1L4
Canada

Juan Díaz

University of Chile - Department of Management Control and Information Systems

Diagonal Paraguay 257
Santiago, 00001
Chile

Pablo Gutierrez Cubillos

University of Chile - Department of Management Control and Information Systems ( email )

Diagonal Paraguay 257
Santiago, 00001
Chile

Pablo Troncoso (Contact Author)

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics ( email )

Athens, GA 30602-6254
United States

Gabriel Villarroel

Ministry of Finance, Chile

Teatinos 120
Santiago, 8340487
Chile

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
32
Abstract Views
190
PlumX Metrics