Economic Mobility and the Rise of the Latin American Middle Class

by Ferreira, Francisco H. G.; Messina, Julian; Rigolini, Jamele; Lopez-Calva, Luis-Felipe; Lugo, Maria Ana; Vakis, Renos; López-Calva, Luis Felipe

• ISBN13: 9780821396346
• ISBN10: 082139634X
• Format: Paperback
• Copyright: 2012-11-09
• Publisher: World Bank Publications

Summary

With moderate but sustained economic growth and generally declining inequality, the 2000s were a good decade for Latin America. Moderate poverty fell from roughly 40% to 30% of the population. Economic mobility powered a perceived increase in the ranks of the Latin American middle class. But who, exactly, belongs to that middle class? How much has it really grown? How much economic mobility do these countries really display? Drawing on a unique combination of data sets - income and consumption distributions, test scores, parental characteristics, personal beliefs and attitudes - this volume sheds new light on a period of pronounced social change in Latin America and the Caribbean. It paints a nuanced picture of a society where the intergenerational transmission of socioeconomic status still prevails, but where upward income movement within generations is now significant. It adopts a middle class definition that is based on economic security, and is arguably less arbitrary than others in the literature, and documents a 50% increase in its size. Yet, most of the continent's population is neither poor nor middle-class - but near-poor or vulnerable. The authors argue that there are many potential benefits from a growing middle class, but caution that whether those benefits come to fruition will depend, to a large extent, on whether countries manage to anchor their middle classes into a new, more cohesive, social contract that emphasizes the inclusion of those who so far have been left behind.

Table of Contents

Foreword	p. xi
Acknowledgments	p. xiii
Abbreviations	p. xv
Overview	p. 1
A middle-income region on the way to becoming a middle-class region	p. 1
Within generations, remarkable upward mobility	p. 4
Across generations, mobility remains low	p. 6
A snapshot of the Latin American middle class	p. 9
The middle class and the social contract	p. 11
Notes	p. 13
References	p. 14
Introduction	p. 15
Latin American "climbers" and "stayers"	p. 17
The broad context	p. 18
Pursuing the questions	p. 19
Notes	p. 22
References	p. 22
Economic Mobility and the Middle Class: Concepts and Measurement	p. 23
Spaces, domains, and concepts of economic mobility	p. 24
Defining the middle class	p. 29
Linking mobility and middle-class dynamics: A matrix decomposition	p. 37
Notes	p. 45
References	p. 46
Mobility across Generations	p. 49
Educational attainment: How important is parental background?	p. 53
The importance of educational achievement	p. 60
From educational to income mobility	p. 65
Policies and intergenerational educational mobility	p. 67
Conclusions	p. 81
Notes	p. 87
References	p. 88
Mobility within Generations	p. 93
Using synthetic panels to study long-term mobility	p. 94
Income mobility in Latin America: The past two decades	p. 98
Unravelling the box: Exiting poverty and entering the middle class	p. 101
Mobility profiles: Insights for policy	p. 108
Concluding remarks	p. 117
Annex 4.1 Data used for intragenerational mobility estimates	p. 124
Annex 4.2 Regional and country intragenerational mobility estimates and decomposition using synthetic panels	p. 125
Notes	p. 132
References	p. 132
The Rising Latin American and Caribbean Middle Class	p. 135
The middle class in Latin America and the Caribbean	p. 136
Recent middle-class growth trends	p. 137
Forecasts for poverty reduction and middle-class growth	p. 142
Who is middle class in Latin America and the Caribbean?	p. 145
Broad class profiles from three exemplar countries	p. 146
Middle-class characteristics, selected countries	p. 147
References	p. 158
The Middle Class and the Social Contract in Latin America	p. 159
The middle class and the shaping of economic policy	p. 160
Values and beliefs of the Latin American middle classes	p. 166
Overcoming a fragmented social contract	p. 171
Notes	p. 179
References	p. 179
Boxes
Assessing the association of socioeconomic status across generations	p. 52
Income mobility in high-income countries	p. 66
Cross-country analysis of policies and institutions and intergenerational mobility	p. 68
Tuition loans in Chile: Is the alleviation of credit constraints a good policy to close the gap in educational attainment between rich and poor?	p. 71
Conditional cash transfers and children's educational outcomes	p. 77
Voucher systems in Chile and Colombia: Did they help the achievements of the poor?	p. 80
Existing findings on intragenerational mobility in Latin America	p. 95
The welfare costs of downward mobility in Nicaragua	p. 108
"Calling in" long-term mobility: Did cell phones improve mobility in rural Peru?	p. 119
Table of Contents provided by Ingram. All Rights Reserved.