EDUCATION AND THE FUTURE OF SOCIAL MOBILITY IN LATIN AMERICAChristian DaudeOECD Economics Department

The Emerging Middle Class in Latin America: Causes, Challenges and Opportunities October 31, 2014 Oxford

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Evidence on social mobility and education in Latin America

Policies to promote upward mobility

Challenges and opportunities ahead

Outline

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• Multidimensional concept• economists usually focus on income• sociologists on occupations/link to social status

• Relative versus absolute

Conceptual issues

• Few panel or retrospective data in LAC• Measurement errors (e.g. income)

Data limitations

• Formal education is a key determinant of earnings• Data available for a relatively large group of countries• Exploit OECD PISA data on test scores and socio-economic

background

Focus in my presentation is on educational mobility

Social mobility: concepts and measurement

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Educational attainment has increased in all income groups, but difference remains significant

Average enrolment rates Enrolment rates by income quintile

Source: Daude (2012) based on WDI and OECD (2010)

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Especially in secondary schooling and beyond

High-school graduation rates in Latin America by quintile of income distribution

Source: OECD Economic Survey of Mexico 2014 (forthcoming)

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Some measures indicate an increase in intergenerational mobility

Source: Daude (2012; 2013).

Beta – coefficient educational mobility

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Some measures indicate an increase in intergenerational mobility

Source: Conconi et al (2007)

Social mobility index

Notes: Countries in light blue present changes that are significant at a level of 95% confidence. The social mobility index (SMI) is computed using a Fields decomposition of the importance of the household’s income per capita and the highest level of parental education in explaining the schooling gap of 13-19 year-old children in a regression that includes other control variables. The SMI is bounded between 0 and 1, with higher values representing higher levels of social mobility. 

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But according to correlation coefficients mobility remains unchanged

Source: Daude (2012; 2013).

Correlation coefficient of own educational attainment with parental educational attainment

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It remains high from an international perspective

Correlation coefficient of own educational attainment with parental educational attainment

Source: Daude (2012; 2013); Hertz et al. (2007)

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Transition probability matrices show significant persistence in educational attainment across generations

Unconditional transition probabilities between parental and own educational attainment

Source: Daude (2012; 2013).

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PISA scores confirm that socio-economic status matters more in LAC

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• Universal Early Childhood Development

Policies to increase mobility and reduce vulnerability

Notes: Proportion of 3 to 5 year olds enrolled in pre-school programmes. Data are not strictly comparable between countries, because of differences in the counting of kindergarten and pre-school enrolment. Unfortunately, these categories cannot be separated in most surveys

Source: Based on SEDLAC database, accessed April 2010, based on the latest available national household surveys, circa 2008-09.

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• More equitable distribution of resources• Expanding compulsory years of education

(for poor households, incentives might be needed).

• Focus on quality, results and skills.

More and better secondary schooling

Increase the social mix within schools

Financing tertiary education (grants, scholarships, etc.)

Policies to increase mobility and reduce vulnerability

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• Addressing income inequality might help also to reduce intergenerational transmission

Policies to increase mobility and reduce vulnerability

Source: OECD (2010)

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End of the commodity super-cycle and lower

growth might bring challenges

This might also be a good moment for reforms towards more inclusive growth in LAC.

Weaker labour

markets – in the

absence of social

safety nets – might

push vulnerable

population back into

poverty

Unfulfilled

expectations

projecting recent

income growth into

the future

Social compacts

around an agenda that

favours social mobility

and reduces social

vulnerability of the

emerging middle

classes are feasible.

Challenges and opportunities ahead

EDUCATION AND THE FUTURE OF SOCIAL MOBILITY IN LATIN AMERICA – THANK YOUChristian DaudeOECD Economics Department

The Emerging Middle Class in Latin America: Causes, Challenges and Opportunities October 31, 2014 Oxford

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Daude, C. (2012), “Education, middle classes and social mobility in Latin America,” Pensamiento Iberoamericano No. 10 (in Spanish), pp. 29-48.

Daude. C. (2013), “Education and social mobility in Latin America,” LASA Forum, 44 (2), pp. 7-9.

Daude, C., de Laiglesia and A. Melguizo (2014), “Covering the uncovered: Labor informality, pensions and the emerging middle class in Latin America,” in Jeff Dayton-Johnson (ed.) Latin America's Emerging Middle Classes, Palgrave Macmillan, forthcoming.

Daude, C., Hamlet Gutierrez and Angel Melguizo (2014), “Political attitudes of the middle class: the case of fiscal policy,” in Jeff Dayton-Johnson (ed.) Latin America's Emerging Middle Classes, Palgrave Macmillan, forthcoming.

Daude, C. and A. Melguizo (2014), “Tax Morale and Perceptions on Social Mobility, Fairness and Meritocracy in Latin America,” in Progress in Economics Research, Volume 28, Nova Publisher, January.

OECD (2010), Latin American Economic Outlook 2011: How Middle-class is Latin America?, OECD Development Centre, Paris.

OECD work on social mobility and middle classes in LAC