The Vicious and Virtuous Circle of Inequality: A Comparison of Social Mobility between Latin American and European Countries

This study examines the structural and relative dimensions of intergenerational social mobility across ten countries, encompassing five from Latin America and five from Europe, through the application of an innovative measurement approach. Using the Mutual Information Index, we provide a nuanced analysis that simultaneously captures and distinguishes between the structural and relative effects in social mobility patterns. Two main hypotheses guide our research. The first posits that nations with late industrialization processes, exemplified by the Latin American countries in our sample, exhibit reduced social fluidity compared to their early-industrialized counterparts. We anticipate that countries with intermediate industrialization timelines, such as Italy and Spain, will display characteristics more closely aligned with late-industrialized nations. Our findings largely support this hypothesis, although Italy's behavior deviates somewhat, showing greater similarity with early-industrialized countries.

The second hypothesis proposes that early-industrialized nations show a reduction in inequality gaps relative to late-industrialized countries when assessed through the M Index, particularly with regard to the marginal effect. Contrary to our expectations, this hypothesis is not supported. Instead, we observe an inverse relationship: in Latin American countries, the marginal effect amplifies inequality, while in European nations, it mitigates class barriers. The application of the Mutual Information Index reveals a mechanism that elucidates the "vicious circle" prevalent in late-industrialized nations and the "virtuous circle" characteristic of early-industrialized countries.

This research highlights the methodological advantages of incorporating both structural and relative dimensions in social mobility analyses, complementing traditional approaches that primarily focus on relative mobility. Our findings contribute to the broader discourse on comparative social mobility, offering insights into the complex interplay between industrialization timelines and social fluidity in diverse national contexts. This study not only advances our understanding of intergenerational mobility patterns but also underscores the importance of multifaceted analytical approaches to capture the nuanced dynamics of social stratification.