Intergenerational mobility along the income distribution: estimates using administrative data for a developing country

Abstract

In this paper, we provide novel estimates of intergenerational mobility for Uruguay that for the first time in a developing country, are based on administrative tax-social security records. We estimate the Intergenerational Ranking Association (IRA) and explore non-linearities. We explore alternatives to address the role of informal labour market, which is one of the main challenges to obtain precise measure of intergenerational mobility for a developing country. We have three main results: first, the level of persistence is higher when we consider individuals with less attachment to the formal labour market. Second, we find evidence of non-linearities in the degree of intergenerational persistence, being substantially higher for high-income households. Finally, there is heterogeneity by gender on the degree of intergenerational mobility, with mother-daughter transmission being the most persistent.