Education is probably the first thing that comes to mind when thinking about policies to foster upward social mobility. Building human capital is a major driver of economic growth, and empirical evidence from OECD countries shows that persistence of educational attainment across generations is a key factor behind persistence in earning differentials.1 The microeconomic evidence supports this, showing sizeable returns to education. The investment households make in education tends to be profitable from both a social and private viewpoint – and in Latin America these returns are particularly strong.2 Among the Latin American middle sectors, education is additionally associated with increased life satisfaction, pride and sense of identity.3 All this should create fertile ground to use education policy in pursuit of both economic and social aims.

Education can certainly be a powerful tool for upward mobility, at least for those able or willing to invest the time and resources. But if opportunities are unevenly distributed, public intervention in education can fail. Factors such as unequal access to educational services, significant differences in the quality of education between private and public schools, or constraints in access to finance can mean policies become regressive in their effect and act in practice to perpetuate inequality. To be effective in promoting mobility, education policies need to have equity considerations built into their design from the outset.4

Where other mechanisms of social exclusion such as discrimination by race or gender are present, simply providing equal access to education may not be enough – and evidence shows that such discrimination is still prevalent in Latin America. A recent study by the Inter-American Development Bank (IDB) found that differences in wages due to race, for example, are around 30% in the region.5 Equalising education attainment across different ethnic groups would reduce this gap by 10 percentage points. This chapter presents some evidence that these problems are not confined to the disadvantaged, but extend also to the middle sectors. Education policies must therefore both rely on and be complementary to other policies to foster social inclusion.

This chapter also lays to rest the frequently heard assertion that Latin America’s famously high level of static income inequality6 might be a good thing when accompanied by high social mobility – by demonstrating the rewards to investment in human capital, for example. Public policies to reduce inter- and intra-generational inequalities are more than justified.

This chapter documents the degree of educational mobility in the region with a special emphasis on the middle sectors. Although the debate regarding the relative importance of innate and environmental factors ("nature versus nurture") is not settled,7 there is evidence that inherited cognitive skills are only a moderate driver of inter-generational income mobility.8 In this sense, an international comparison with OECD countries – especially high-mobility ones – can serve as a benchmark to assess the extent to which mobility in Latin America could be increased.9 We have done this by drawing on a wide range of data: from the results of the Latinobarómetro surveys, through the latest OECD Programme for International Student Assessment (PISA) database, to results in the literature based on household surveys. While rich in information about the educational characteristics of parents and children, the first two datasets do not have detailed information about household income levels. Therefore, most of the analysis in this chapter must focus on income deciles rather than the 50-150 median-income definition introduced in Chapter 1.

The chapter also explores the relationship between educational mobility and static income inequality, the returns to education and public expenditure on education. It concludes with a discussion of educational policies that could enhance equal opportunities and mobility across generations in the region.

The chapter’s emphasis on education can be justified

by the importance of education and human capital as a determinant of earnings and the possibility for concrete public policy action in this area as well as by the availability and quality of data.10 But education can also be seen as an exemplar of broader traits in the multidimensional and complex matrix of influences on social mobility and status, providing examples and evidence of how policy can seek to influence these too.