Intergenerational Mobility of Wages in Brazil

Abstract

We present evidence on intergenerational mobility of wages in Brazil using a large household survey. We estimate the wage elasticity coefficient through a two-sample instrumental variable procedure (Angrist and Krueger (1992) and Arellano and Meghir (1992)). We find that the degree of intergenerational mobility of wages in Brazil is lower than the one observed in developed countries. The degree of mobility varies across regions and racial groups. Our results also show that wage mobility has been increasing for younger cohorts. We also find evidence of significant nonlinearities in the mobility pattern in Brazil and that the intergenerational transmission of education is related to wage mobility in several ways.