Estimation of mobility using panel data is biased by the presence of measurement error. This paper shows that dynamic pseudo-panel methods can be used to consistently estimate mobility in the presence of non-classical measurement errors. These methods are applied to data on earnings from Mexico. Absolute mobility in earnings is found to be very low in Mexico, suggesting that the high level of inequality found in the cross-section will persist over time.

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This paper presents empirical evidence on the determinants for labour market earnings for males and females in the slums of Rio de Janeiro. It exploits a data set of 21,704 household from 51 different slums from the city of Rio de Janeiro. It shows that the informal sector can be a rational choice from the workers point of view, in particular at a younger age. In addition, it supports the existence of selection effects, suggesting that occupational choices are non-random.

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The purpose of this work is to evaluate the role of constraints on mobility in determining the spatial inequality in Brazil. Our results suggest that mobility constraints are responsible for a significant portion of the Northeast-Southeast disparities in income, but that these constraints may actually keep overall poverty rates in Brazil down at the expense of increased inequality.

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This paper explores the role of deprivation-driven predation in economic performance. I analyze an economy with many individuals who differ only in their endowment of wealth and where property rights are endogenous. Inequality may hurt economic performance; however, asset redistribution may not be the appropriate policy choice: if the economy is poor enough, redistribution may make things worse. If the economy if wealthy, redistribution can serve to coordinate a high-output equilibrium

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In this paper more education does not necessarily decrease inequality according to Lorenz dominance. Increases in education increase and then decrease growth and income inequality, when measured by the Gini coefficient. There is no clear functional relationship between growth and income inequality. The effect of inequality on growth may be spurious, but may still provide important information on the nonlinear relationship between growth and education.

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This paper models the occupational choice of individuals under the presence of underground markets, which are defined as economic activities that evade taxation and governmental regulation. The aim of the paper is to analyse whether inequality gives rise to the existence of underground markets and the latter's role in the dynamics of economic development.

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