2Intergenerational Mobility of Wages in Brazil

In this paper, we present evidence on intergenerational mobility of wages in Brazil. We use data drawn from the mobility supplement of the PNAD 1996, a Brazilian household survey. The mobility supplement of the PNAD 1996 provides information on the education and occupation of the household head's father, but it does not give information on the father's earnings or wage. In order to construct a measure of father's wage we use a methodology proposed by Angrist and Krueger (1992) and Arellano and Meghir (1992) and applied by Bjorklund and Jantti (1997) to the study of intergenerational mobility in the United States and Sweden. We find that the degree of intergenerational mobility of wages in Brazil is lower than the one observed for developed countries. Moreover, mobility varies across regions and racial groups. We find evidence of significant nonlinearities in the mobility pattern in Brazil. More specifically, mobility is lower for sons of low-wage and high-wage fathers than for middle-wage fathers. We show that these nonlinearities may help explain the observed differences in mobility patterns between regions and racial groups and the behavior of mobility acros