Comparing Economic Mobility with Heterogeneity Indices: An Application to Education in Peru

The long literature on intergenerational transmission of well-being has largerly been driven by concerns for inequality of opportunity and the persistence of low levels of wellbeing among certain social groups.A comparative strand of this literature seeks to compare indicators of these transmission mechanisms, i.e. mobility regimes, across societies, regions or time. In this paper I contribute to this literature by suggesting an additional way of comparing mobility regimes with indices of heterogeneity across distributions based on a traditional homogeneity test of multinomial distributions, which is helpful to compare discrete-time transition matrices. The indices measure the degree of dissimilarity between two or more transition matrices controlling for population size and the dimensions of the matrix. The indices provide a good alternative to between-group comparisons based on linear parametric models (chiefly OLS) in which either slope coefficients are compared directly or group dummy variables are interacted with parameters from the models. They also provide complementary information to comparisons based on summary indicators of transition matrices. An application to educational mobility in Peru shows that the transition matrices of males and females are more similar among the youngest cohorts of adults.

Author: Gaston Yalonetzky

Year: 2009

Citation: Yalonetzky, G. (2009). 'Comparing economic mobility with heterogeneity indices: An application to education in Peru', OPHI Working Paper 33, Oxford Poverty and Human Development Initiative (OPHI), University of Oxford.