The Measurement of Inequality of Opportunity : Theory and an Application to Latin America

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, ho...

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Bibliographic Details
Main Authors:	Ferreira, Francisco H.G., Gignoux, Jérémie
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	AGRICULTURAL WORKERS BETWEEN-GROUP INEQUALITY CENTRAL AMERICA CENTRAL AMERICAN CONSUMPTION EXPENDITURES CONSUMPTION INEQUALITY COUNTERFACTUAL DATA SET DATA SETS DECOMPOSABLE INEQUALITY MEASURES DECOMPOSITION OF INEQUALITY DESCRIPTIVE STATISTICS DEVELOPING COUNTRIES DISADVANTAGED GROUPS DISCRIMINATION DISTRIBUTION FUNCTIONS DISTRIBUTION OF OPPORTUNITIES DISTRIBUTION OF OUTCOMES DISTRIBUTION OF WELFARE EARNINGS EARNINGS INEQUALITY ECONOMIC CHARACTERISTICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC INEQUALITY ECONOMIC OPPORTUNITY ECONOMIC PERFORMANCE ECONOMIC REVIEW ECONOMIC SUCCESS ECONOMIC THEORY ECONOMIES OF SCALE EDUCATION LEVELS EMPIRICAL ESTIMATES EMPIRICAL LITERATURE EQUAL OPPORTUNITIES EQUALITY OF OPPORTUNITY ETHNIC GROUPS ETHNIC MINORITIES ETHNIC MINORITY EXPENDITURE FAMILIES FAMILY INCOMES FINANCIAL MARKETS FUNCTIONAL FORM GENDER GINI COEFFICIENT GROUP INEQUALITIES GROUPS OF PEOPLE HOUSEHOLD CONSUMPTION HOUSEHOLD CONSUMPTION PER CAPITA HOUSEHOLD DATA HOUSEHOLD HEAD HOUSEHOLD HEADS HOUSEHOLD INCOME HOUSEHOLD INCOMES HOUSEHOLD MEMBERS HOUSEHOLD PER CAPITA INCOME HOUSEHOLD SURVEY HOUSEHOLD SURVEY DATA HOUSEHOLD SURVEYS HOUSEHOLD WELFARE HOUSEHOLDS INCOME DATA INCOME DIFFERENCES INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME INEQUALITY INCOME SHARE INCOME SHARES INCOMES INDICES OF INEQUALITY INDIVIDUAL COUNTRIES INDIVIDUAL INCOMES INEQUALITY INEQUALITY AVERSION INEQUALITY AVERSION PARAMETER INEQUALITY DECOMPOSITION INEQUALITY IN EARNINGS INEQUALITY INDEX INEQUALITY MEASURE INEQUALITY MEASUREMENT INEQUALITY MEASURES INEQUALITY OF OPPORTUNITIES INEQUALITY OF OPPORTUNITY INEQUALITY TRAPS INTERGENERATIONAL MOBILITY INTERNATIONAL BANK INTERNATIONAL COMPARABILITY LABOR FORCE LABOR FORCE PARTICIPATION LABOR MARKET LATIN AMERICAN LEVELS OF INEQUALITY MEAN INCOME MEAN LOG DEVIATION MEASURE OF INEQUALITY MEASUREMENT ERROR MEASURES OF INEQUALITY MEASURING INEQUALITY MULTIPLE EQUILIBRIA NATIONAL SURVEYS OVERALL INEQUALITY PATH DEPENDENCE PER CAPITA CONSUMPTION PER CAPITA INCOME POLICY RESEARCH POOR POPULATION SHARE POPULATION SUBGROUP POSITIVE EFFECT POVERTY LINE POVERTY OUTCOMES POVERTY PROFILE PRIMARY EDUCATION PUBLIC EDUCATION PUBLIC EXPENDITURES PUBLIC POLICY RELATIVE IMPORTANCE RESIDUAL TERM RURAL RURAL AREA RURAL AREAS SIGNIFICANT DIFFERENCES SOCIAL MOBILITY TAXATION TOTAL INEQUALITY UNEQUAL ACCESS UNEQUAL OPPORTUNITIES
Online Access:	http://documents.worldbank.org/curated/en/2008/07/9631175/measurement-inequality-opportunity-theory-application-latin-america http://hdl.handle.net/10986/6859

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Summary:	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.

The Measurement of Inequality of Opportunity : Theory and an Application to Latin America

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