Is Entrepreneurship a Channel of Social Mobility in Latin America?

Jul 2013
This paper provides a summary of the findings contained in a forthcoming issue of the Latin American Journal of Economics on entrepreneurship in Latin America as a vehicle for upward social mobility, especially for the middle class. The income persistence coefficients estimated with pseudo-panel data for Colombia, Ecuador, and Uruguay indicate that entrepreneurial activity is a channel of intergenerational mobility, while the estimates of asset persistence for Mexico using a special survey show that entrepreneurship increases mobility across generations. Although persistence coefficients do not indicate the direction of such mobility, the estimates of income differentials between entrepreneurs and non-entrepreneurs for Ecuador and Mexico lend support to the hypothesis that upward mobility dominates.