DT 05/22 - Intergenerational mobility along the income distribution: estimates using administrative data for a developing country

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 nonlinearities. 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.