Florian Chávez-Juárez

The Impact of Oportunidades on Inequality of Opportunity in Rural and Urban Areas in Mexico

The analysis of inequality of opportunity has become an important issue in recent economic literature, especially in Latin America. This study proposes a link to the capability approach and analyzes the performance of the Mexican conditional cash transfer program Oportunidades in terms of inequality of opportunity. A MIMIC framework is used to estimate childrens latent development capabilities and their dependence on family background variables. The results suggest that Oportunidades increases overall capabilities and is able to reduce significantly the dependence of capabilities on circumstances, mostly family background variables, hence reducing inequality of opportunity. The findings of this study suggest that the use of conditional cash transfer programs might be a very useful tool to reduce inequality of opportunity.

Determinants of Internal Migration in Mexico at an Aggregated and a Disaggregated Level

This study analyses internal migration in Mexico from 2000 to 2005 using econometric models in order to find the determinants of migration at an aggregated level. The study is performed for several subpopulations, which allows understanding the determinants of migration at a deeper level. Significant differences in the determinants among educational groups are found, especially highly educated people present different pattern with respect to lower educated workers. Differences in gender are relatively modest, whereas different age groups behave differently, even though differences are not as sharp as for educational groups. The results suggest that using aggregate data might overlook some policy relevant sub-group specific phenomena.

Does Tracking Shape Intergenerational Transmission of Educational Attainment? Evidence from Switzerland

The Swiss schooling system is characterized by early tracking of pupils into di erent types of education, which suggests that the impact of parental background may a ect transitions at a relatively young age which condition the future transitions of their children as well as their nal educational attainment. In this study, we investigate the impact of family background variables on schooling outcomes at upper secondary level by means of a two-stage estimation model. Our empirical speci cation enables us to take into account the cumulative impact of parental variables on tracking and on upper secondary school achievement. As expected, favourable family background attributes are positively correlated with school outcomes at all stages but we show that parental e ects remain important at higher grade levels, even with early selection through tracking and after controlling for cognitive ability. These ndings are especially relevant for girls and should help policymakers in designing equal opportunity tracking schemes, especially at young ages.

The Credit Behavior of Households - A Behavioral Approach

The access to credit is generally seen as an important ingredient for development. However, over the last years reports on families contracting excessive debt and falling into credit traps have also increased. In this paper I develop a model of family credit behavior based on insights from behavioral economics. I particularly consider phenomena like keeping-up-with-the-Joneses, a limited time horizon, gain-loss-asymmetry and over-confidence. The model coherently reproduces the level and the distribution of debt over for all socioeconomic groups. The results suggest that the use of a reference-group dependent utility and the precise definition of the reference group are crucial elements in explaining the debt levels of the different socio-economic groups. A policy simulation shows that reducing the amount of available credit (ceiling) might have beneficial effects on consumption and consumption inequality. In this respect, the findings contradict the idea that access to credit is positive for families in all situations.

Agent-Based Models in Development Economics

In this article I discuss the potential role of agent-based modeling techniques in development economics. Development economics has recently seen a strong rise of experimental evidence from the field and the laboratory. At the same time, there is a debate on how theory should adapt to this new approach and its findings. I argue in this paper that the agent-based modeling approach is a promising complement to the traditional modeling techniques, as it can easily incorporate the non-standard findings of the experimental literature. Moreover, I emphasize the opportunity of a mutually beneficial interplay between experiment based empirical research and agent-based models.

The effect of cash transfer programs on educational mobility

In this paper I develop a model to reproduce the phenomenon of high intergenerational correlations in education observed in Latin American Countries. The model is based on empirical evidence and implemented through agent based modeling techniques. The effect of conditional cash transfer programs on educational mobility is then analyzed. The results suggest that conditional cash transfer program can substantially increase intergenerational mobility in education. I find that using parental education as eligibility criterion and adapting the subsidies to the income level can improve the efficiency of a program in increasing educational mobility as compared to a purely income based program.

Which Inequality Makes People Dissatisfied with Their Lives? Evidence of the Link Between Life Satisfaction and Inequalities

This paper aims at establishing a clear link between different types of inequality and life satisfaction in Europe. Indices of income inequality and of inequality of opportunity are proposed to identify the relationship with life satisfaction using six waves of the European Social Survey (ESS). In addition, reference groups based on similarly old and educated individuals are created to account for differences in relative income. Results show that income inequality, high levels of inequality of opportunity and negative relative socioeconomic status reduce peoples life satisfaction in Europe. Moreover, variations in inequality of opportunity explain more than variations in income inequality. Our main results suggest that all socioeconomic groups are dissatisfied with income inequality, whereas primarily low socioeconomic groups worry about inequality of opportunity. We interpret our results advancing the hypothesis that high socioeconomic groups might fear to lose their advantaged position. This fear will then increase with income inequality. In contrast, limited social mobility reduces the satisfaction of disadvantaged groups, whereas it generates a lower risk of falling down for those with good circumstances and consequently no effects on their subjective well-being.

On the Role of Agent‐Based Modeling in the Theory of Development Economics

In this article I discuss the potential role of agent-based modeling techniques in development economics. Development economics has recently seen a strong rise of experimental evidence from the field and the laboratory. At the same time, there is a debate on how theory should adapt to this new approach and its findings. I argue in this paper that the agent-based modeling approach is a promising complement to the traditional modeling techniques, as it can easily incorporate the non-standard findings of the experimental literature. Moreover, I emphasize the opportunity of a mutually beneficial interplay between experiment-based empirical research and agent-based models.

Intergenerational Transmission of Education: The Relative Importance of Transmission Channels

This paper aims at quantifying the relative importance of different transmission channels generating the high levels of intergenerational correlations in education, especially in Latin America. A simultaneous equations model is applied to rich survey data from Mexico. The results show that the economic situation of the family has the highest impact, even more than heritability of cognitive abilities. The long run economic situation seems to matter more than the current consumption level. Parental education affects the schooling outcome directly but also indirectly through the economic situation, which is particularly true for the father.Education is a main player in social mobility, however, it remains unclear through which channel the high observed intergenerational correlations of educational attainment are produced. The literature proposed very different mechanisms that could drive these correlations. This paper uses a structural equation model and data from Mexico to estimate the relative importance of the main channels simultaneously. The results sustain all of the most commonly proposed mechanisms and underline the importance to look at them simultaneously. The economic situation of a family has a large direct effect on childrens schooling attainment, even when controlling for all other possible channels. Parental education has direct and indirect effects through the economic situation. Together, these two findings clearly reject the hypothesis that the educational correlations are only the fruit of a transmission of ability from one generation to the next and sustaining the idea that some inequality of opportunity is present.

The Effect of Cash Transfer Programs on Educational Mobility - An Agent Based Approach

In this paper I develop a model to reproduce the phenomenon of high intergenerational correlations in education particularly observed in Latin American Countries. The model is based on empirical evidence and implemented through agent based modeling techniques. The effect of conditional cash transfer programs on educational mobility is then analyzed. The results suggest that conditional cash transfer program can substantially increase intergenerational mobility in education. I find that using parental education as eligibility criterion and adapting the subsidies to the income level can improve the efficiency of a program in increasing educational mobility as compared to a purely income based program.