This doctoral dissertation seeks to understand key underlying institutions (formal and informal) that reproduce inequality and social rigidity in Chile, mainly focusing on vicious dynamics taking place in the realm of education (school and tertiary level).

Education is a key institution in society, playing a fundamental role in the reproduction of inequality through the selection of leaders (generally from privileged social backgrounds) and also via the socialisation of new generations – perpetuating worldviews, ideologies and social norms. However, it may also play a crucial role in the transformation of prevailing institutions through technical knowledge, political deliberation and/or cultural change, and thus in creating new development pathways for society.

In order to analyse the role of formal and informal institutions in the perpetuation of inequality and social rigidity, taking education as a critical case study, this dissertation develops four essays from a political economy and institutional analysis approach. The first essay sets the scene by analysing the political economy of inequality in Chile from an historical perspective. The second essay investigates the political economy of the Chilean school system and its role in the reproduction of inequality. The third paper highlights the importance of informal institutions, and their role in shaping individuals’ preferences. The fourth and final paper analyses the joint effect of social class and institutional horizontal differentiation of the tertiary education system on intergenerational social mobility and labour market trajectories of graduates.