Income Mobility in Latin America

Latin America is the most unequal region in the world. High levels of inequality are pervasive in spite of recent economic growth, institutional development and deliberate argeted social interventions. Critical for the effective combat of inequality is the realization that its resilience is not a static phenomenon. Instead, inequality is dynamic, affected by structural and transitory components, region-wide and country specific drivers. Understanding its dynamics is an important tool for policy-making. When governments know the details about the most effective ways of moving people up or prevent them from falling down along the income ladder, the design of policies becomes more effective. Also, when governments understand better the tools to cope with downward mobility, the welfare losses associated could be at least ameliorated, social investment and social protection interventions better conceived.