Publication: Where You Are Born Matters: Inequality of Opportunities and Intergenerational Mobility across Colombia’s Territory
Loading...
Date
2025-05-21
ISSN
Published
2025-05-21
Author(s)
Editor(s)
Abstract
Abstract The circumstances into which individuals are born are beyond their control, yet they play a significant role in shaping people’s economic opportunities and are thus key drivers of inequality and its persistence over time. Understanding the role of place of birth is essential to understanding inequality of opportunities and social mobility, both of which directly affect overall inequality. This paper uses machine learning techniques and data from Colombia, one of the most unequal countries in Latin America and the Caribbean, to estimate inequality of opportunity and intergenerational education mobility indexes. The analysis incorporate place of birth and a more granular geographic lens to capture the extent of regional disparities. The findings show that 49 percent of the Gini income inequality is explained by circumstances at birth, and place of birth accounts for up to half of these inequalities. Intergenerational mobility measures at the department (province) level also reveal striking disparities in opportunities across the country. These findings underscore the critical role that place of birth plays in perpetuating inequality, providing important insights for policies aimed at promoting social mobility and reducing territorial disparities.
Link to Data Set
Citation
“Dávalos, María Eugenia; Monroy, Juan Manuel. 2025. Where You Are Born Matters: Inequality of Opportunities and Intergenerational Mobility across Colombia’s Territory. Policy Research Working Paper; 11126. © World Bank. http://hdl.handle.net/10986/43225 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication Geopolitics and the World Trading System(Washington, DC: World Bank, 2024-12-23)Until the beginning of this century, the GATT/WTO system worked. Economic research provided a compelling explanation. It showed that if governments maximize the well-being of their own countries broadly defined, GATT/WTO principles would facilitate mutually beneficial cooperation over their trade policy choices. Now heightened geopolitical rivalry seems to have undermined the WTO. A simple transposition of the previous rationalization suggests that geopolitics and trade cooperation are not compatible. The paper shows that this is only true if rivalry eclipses any consideration of own-country well-being. In all other circumstances, there are gains from trade cooperation even with geopolitics. Furthermore, the WTO’s relevance is in question only if it adheres too rigidly to its existing rules and norms. Through measured adaptation to the geopolitical imperative, the WTO can continue to thrive as a forum for multilateral trade cooperation in the age of geopolitics.Publication Chinese Imports and Industrialization in Africa(Washington, DC: World Bank, 2025-05-12)The rise of China in the global economy has been linked with negative impacts on employment across many high- and middle-income countries. However, evidence for African countries is limited. This paper investigates the causal relationship between Chinese imports and manufacturing employment in Ethiopia. Imports may harm domestic firms through a revenue effect (lower market shares) or benefit them, indirectly if competition spurs innovation or directly through access to better quality or cheaper inputs. The analysis shows that a one unit increase in import penetration leads to a 15.2 percent increase in industry employment. The inputs effect is disentangled from the other two effects by decomposing total Chinese imports by their end-use category using input-output tables. The evidence shows that imported intermediate inputs are driving the employment gains. The findings are consistent with the idea that employment gains are a result of productivity gains and increases in capacity utilization. These employment gains appear to benefit large firms and labor-intensive industries disproportionately.Publication VAT Exemptions, Embedded Tax, and Unintended Consequences(Washington, DC: World Bank, 2025-05-15)The value-added tax (VAT) has proved to be a highly effective tool at raising revenue in developed and developing countries alike. However, the effective operation of the VAT breaks down in the presence of exemptions. Unlike zero rates, exemptions deny input tax credits, thereby increasing production costs and resulting in VAT being embedded within the prices of goods and services. This paper develops a VAT model based on input-output table and household budget survey data for 29 European countries to examine the effects of VAT exemptions on final prices and to assess the merits of their use. Simulation results show that exemptions suffer from the same targeting problems as reduced VAT rates, but, in addition, they are non-transparent and have unpredictable and counterproductive indirect effects. These effects are in addition to the well-known distortionary impact of exemptions on production decisions, and their creation of incentives to self-supply. The paper concludes that the use of exemptions should be limited to addressing pragmatic concerns, such as the disproportionate compliance costs of small businesses and the practical difficulty in taxing margin-based financial services.Publication Disentangling the Key Economic Channels through Which Infrastructure Affects Jobs(Washington, DC: World Bank, 2025-04-03)This paper takes stock of the literature on infrastructure and jobs published since the early 2000s, using a conceptual framework to identify the key channels through which different types of infrastructure impact jobs. Where relevant, it highlights the different approaches and findings in the cases of energy, digital, and transport infrastructure. Overall, the literature review provides strong evidence of infrastructure’s positive impact on employment, particularly for women. In the case of electricity, this impact arises from freeing time that would otherwise be spent on household tasks. Similarly, digital infrastructure, particularly mobile phone coverage, has demonstrated positive labor market effects, often driven by private sector investments rather than large public expenditures, which are typically required for other large-scale infrastructure projects. The evidence on structural transformation is also positive, with some notable exceptions, such as studies that find no significant impact on structural transformation in rural India in the cases of electricity and roads. Even with better market connections, remote areas may continue to lack economic opportunities, due to the absence of agglomeration economies and complementary inputs such as human capital. Accordingly, reducing transport costs alone may not be sufficient to drive economic transformation in rural areas. The spatial dimension of transformation is particularly relevant for transport, both internationally—by enhancing trade integration—and within countries, where economic development tends to drive firms and jobs toward urban centers, benefitting from economies scale and network effects. Turning to organizational transformation, evidence on skill bias in developing countries is more mixed than in developed countries and may vary considerably by context. Further research, especially on the possible reasons explaining the differences between developed and developing economies, is needed.Publication Economic Consequences of Trade and Global Value Chain Integration(World Bank, Washington, DC, 2025-04-04)This paper introduces a new approach to measuring Global Value Chains (GVC), crucial for informed policy-making. It features a tripartite classification (backward, forward, and two-sided) covering trade and production data. The findings indicate that traditional trade-based GVC metrics significantly underestimate global GVC activity, especially in sectors like services and upstream manufacturing, and overstate risks in early trade liberalization stages. Additionally, conventional backward-forward classifications over-estimate backward linkages. The paper further applies these measures empirically to assess how GVC participation mediates the impact of demand shocks on domestic output, highlighting both the exposure and stabilizing potential of GVC integration. These new measures are comprehensively available on the World Bank’s WITS Platform, providing a key resource for GVC analysis.
Journal
Journal Volume
Journal Issue
Citations
Collections
Related items
Showing items related by metadata.
Publication Revisiting the Distributive Impacts of Fiscal Policy in Colombia(World Bank, Washington, DC, 2023-07-18)Colombia is one of the most unequal countries in the region and the world. Given the redistributive role of fiscal policy, this study uses recent data from the 2021 Integrated Household Survey to explore the impacts of taxes and spending on poverty and inequality in Colombia. The study introduces innovations to the literature on Colombia, including an update of the fiscal microsimulation model to reflect the most recent economic context; an introduction of new fiscal policy parameters, such as gasoline subsidies and carbon taxes; and methodological improvements. The results show positive redistributive impacts, but these are considerably lower than those seen in other country members of the Organisation for Economic Co-operation and Development (OECD). Direct taxes and transfers reduce the Gini index from 0.543 to 0.505; and direct taxes, indirect taxes, subsidies, and monetary transfers reduce total poverty from 42.1 to 40.2 percent and extreme poverty from 16.1 to 11.7 percent. Direct taxes, transfers, and subsidies are progressive and contribute to poverty reduction, while indirect taxes such as the value-added tax or consumption tax are regressive and do not reduce poverty. This reflects a tax system that is progressive, but not progressive enough (with a low proportion of the population with high levels of income contributing), and cash transfer and subsidy programs that have room for improvement in their targeting.Publication The Measurement of Inequality of Opportunity : Theory and an Application to Latin America(World Bank, Washington, DC, 2008-07)What part of the inequality observed in a particular country is due to unequal opportunities, rather than to differences in individual efforts or luck? This paper estimates a lower bound for the opportunity share of inequality in labor earnings, household income per capita and household consumption per capita in six Latin American countries. Following John Roemer, the authors associate inequality of opportunity with outcome differences that can be accounted for by morally irrelevant pre-determined circumstances, such as race, gender, place of birth, and family background. Thus defined, unequal opportunities account for between 24 and 50 percent of inequality in consumption expenditure in the sample. Brazil and Central America are more opportunity-unequal than Colombia, Ecuador, or Peru. "Opportunity profiles," which identify the social groups with the most limited opportunity sets, are shown to be distinct from poverty profiles: ethnic origin and the geography of birth are markedly more important as determinants of opportunity deprivation than of outcome poverty, particularly in Brazil, Guatemala, and Peru.Publication Earnings Inequality Within and Across Gender, Racial, and Ethnic Groups in Four Latin American Countries(World Bank, Washington, DC, 2008-04)Latin American countries are generally characterized as displaying high income and earnings inequality overall along with high inequality by gender, race, and ethnicity. However, the latter phenomenon is not a major contributor to the former phenomenon. Using household survey data from four Latin American countries (Bolivia, Brazil, Guatemala, and Guyana) for which stratification by race or ethnicity is possible, this paper demonstrates (using Theil index decompositions as well as Gini indices, and 90/10 and 50/10 percentile comparisons) that within-group earnings inequality rather than between-group earnings inequality is the main contributor to overall earnings inequality. Simulations in which the relatively disadvantaged gender and/or racial/ethnic group is treated as if it were the relatively advantaged group tend to reduce overall earnings inequality measures only slightly and in some cases have the effect of increasing earnings inequality measures.Publication Economic Mobility in Europe and Central Asia : Exploring Patterns and Uncovering Puzzles(World Bank Group, Washington, DC, 2015-01)Substantial upward economic mobility in the majority of countries in Europe and Central Asia in the 2000s translated into achievements in reducing poverty and boosting shared prosperity. Although factors associated with upward mobility vary significantly by country, education and jobs undoubtedly play an important role in lifting households out of poverty and helping them to improve their living standards. This study finds there is a puzzling mismatch between the objective economic mobility patterns observed in survey data and people's subjective perception of their mobility. A majority of people in the region perceives they are worse off economically than in the past and voice frustration over limited opportunities to improve their lives. This disconnect is partly explained by increased inequality in the region, an increasing sense of unfairness in the processes to move up, and a more marked sense of insecurity and vulnerability. Although the region has been making headway in lifting households out of poverty, ensuring sustainable progress toward poverty reduction and shared prosperity requires policies that promote human capital accumulation, foster job creation, and offer adequate protection to improve households' resilience to shocks.Publication Bosnia & Herzegovina(World Bank, Washington, DC, 2016-07)The aim of this case study is to qualitatively assess men and women's perceptions of economic mobility, access to labor market and entrepreneurship opportunities, and the impact of selected labor market and social assistance policies. Through the use of focus group discussions and semi-structured interviews, the study aims to uncover underlying differences in perspective by gender, related to the main study topics. The study is structured along four main themes: (1) economic mobility and shared prosperity; (2) pathways and barriers to employment; (3) youth transitions, and (4) coping with poverty and joblessness.
Users also downloaded
Showing related downloaded files
No results found.