Social Mobility Under Mutual Index View: The Vicious Circle and the Virtuous Circle of Inequality. A Comparison Between Latin American and European Countries

Abstract This paper analyses trends in both the structural and relative dimensions of the relationship between origins and destinations in social mobility across ten countries, five from Latin America and five from Europe, proposing an alternative measure. We employ the Mutual Information Index, a measure that allows us to simultaneously observe and differentiate between structural and relative effects. Two hypotheses are proposed and tested. The first posits that countries with late industrialization (in our case, the Latin American countries) exhibit lower social fluidity compared to early industrialized nations. Early-late countries, such as Italy and Spain, are expected to align more closely with late-industrializing nations. The results support this hypothesis, though they nuance Italy’s behaviour, as it aligns more with early industrialized countries. The second hypothesis suggests that early-industrialized countries reduce inequality gaps in comparison to late-industrialized countries when considering the M-Index, particularly regarding the marginal effect. However, this hypothesis is not corroborated; instead, we observe an inverse effect. In Latin American countries, the marginal effect exacerbates inequality, whereas in European countries, it reduces class barriers. The Mutual Information Index thus reveals a mechanism explaining the “vicious cycle” of late-industrializing nations and the “virtuous cycle” of early-industrialized ones. This study demonstrates the advantages of incorporating the decomposition between structural and relative dimension in methodological approaches alongside traditional analyses based on last ones.