Pigmentocracy, social mobility and inequality of opportunity in Mexico

Master in Economics: Empirical Applications and Policies. Academic Year: 2019-2020Wealth inequality in Mexico has gained attention in recent years, with a public responding to economic realities that precipitate less security and a more narrow horizon of opportunity for its citizens. This paper examines 2016 MMSI data on a variety of mobility indicators to illuminate the mechanisms that lead to better or worse socioeconomic outcomes, including by occupation, education and wealth. The inequality of opportunity is used to indicate justifiable and unjustifiable disparities. This paper addresses the current situation in Mexico, studying existing inequalities in wealth by a variety of individual traits, as well as the opportunities for improvement of situation by education, occupation, or wealth. Importantly, this work takes on a variety of measures from the specific perspective of skin colour based on the uniquely compelling feature of the PERLA survey for individual self-identification, which builds on existing literature around pigmentocracy. There is also evidence, among growing inequality, that the average Mexican is not aware of their true socioeconomic positioning (61% of Mexicans reported being in the middle class but only 12% are), which happens across the entire wealth distribution. Cross-sectional data is used to calculate measures that show movement between 2 generations, parent and child, or a short-run mobility expectation. Absent income data, a wealth index is also constructed based on reported presence of various material resources in 2 generations. Notably, the effect of urbanicity is generally on par with skin color differences. There is persistence at the extremes of the wealth distribution, indicating security for the wealthiest Mexicans, and a consistent instability among the middle of distribution, where evidence suggests a high probability to fall in their standing