Intergenerational Earnings Mobility in Mexico
DOI:
https://doi.org/10.25071/1874-6322.40577Keywords:
Inequality, Intergeneration mobility, Rank-rank coefficient, Two-Sample Two-Stage Least Squares, MexicoAbstract
Intergenerational mobility is a key concern in unequal societies, yet evidence from developing countries remains scarce due to limited linked earnings data across generations. This paper estimates intergenerational earnings mobility in Mexico using a regularised Two-Sample Two-Stage Least Squares (TSTSLS) approach that integrates machine learning regularisation techniques to improve prediction and mitigate measurement error biases. I combine retrospective family background data from the 2011 ESRU Social Mobility Survey with earnings data from the National Urban Employment Survey (1987–1991), constructing accurate proxies for permanent parental
income through a “pseudo-parent” imputation strategy matched on demographic characteristics. I estimate the intergenerational elasticity of earnings and rank-rank coefficient at national, urban, and regional levels, systematically evaluating attenuation and life-cycle bias effects. Results reveal substantially lower mobility than previously suggested. On average, 64% of fathers’ earnings advantage is trasmited to their children. Moreover, a 10 percentile point increase in fathers’ earnings rank is associated with a 3.1 percentile points increase in the children’s earnings rank. Regional disparities are stark, the South exhibits highest persistence while the North shows greatest mobility, positioning Mexico among the least mobile countries globally. These findings underscore the need for targeted regional policies to address Mexico’s spatial inequalitv in economic opportunity.
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