Social mobility between generations can be high in Chile, but only if you live in the right region. This is the suggestion of a new study from researchers at the University of Chile’s Faculty of Economics and Business.
In the northern region of Antofagasta (home to the port city of the same name), a child born to parents in the bottom quintile for national income distribution had a 30 per cent probability of belonging to the top quintile as an adult.
However, a child born to parents in the bottom quintile for national income distribution from the southern region of La Araucanía – home to the city of Temuco and the heartland of Chile’s indigenous Mapuche people – had only an eight per cent chance of reaching the top quintile as an adult. In addition, the probability of them remaining in the bottom quintile was 33 per cent – 20 percentage points higher than the equivalent figure for those in the region of Antofagasta.
The rich are also more likely to remain rich in some areas. The probability that a child will be in the richest quintile as an adult when born to parents in the richest quintile is, according to the study, as high as 45 per cent in the Antofagasta region, and 39 per cent in Chile’s Metropolitan region, home to the capital, Santiago.
Authors Pablo Gutiérrez Cubillos and Juan Díaz Maureira say Chile is an interesting case study for intergenerational mobility because it has achieved signiﬁcant development on GDP per capita over the past three decades yet continues to display hugely unequal income distribution, as reflected by its Gini coefficient.
“Progress at the national level hides a notable geographic variation in the degrees of economic success achieved, where some regions of the country have attained remarkable upwards economic mobility while others have experienced relevant persistence through circles of poverty and circles of privilege,” Gutiérrez and Díaz explained.
So, why the differences? The study suggests that positive effects of mining on related sectors’ subsequent growth could be helping mobility in the north, while the south suffers from having the country’s lowest average labour income and being the poorest region overall. The study recommends addressing this with decentralisation policies that develop local government’s ability to improve regional public services and amenities. It also suggests tax reform to ensure public spending is concentrated in regions with less social mobility and is invested in the development of children.
Headline image credit: Nicolás Gutiérrez on Unsplash
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