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Upper and lower bound estimates of inequality of opportunity: A cross-national comparison for Europe

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  • Rafael Carranza

    (London School of Economics)

Abstract

I provide lower and upper bound estimates of inequality of opportunity (IOp) for 24 European countries, between 2005 and 2011. Previous estimates of IOp are lower bounds of its true level and provide a partial view of the importance of involuntarily inherited factors. Upper bound estimates of IOp are much larger than their corresponding lower bound estimates. While the lower bound estimates of IOp account for up to 31\% of total inequality, the upper bound estimates account for up to 90.5\%, suggesting that IOp can be as high as total inequality of outcomes. Indeed, inequality of outcomes has a higher correlation with the upper bound estimates of IOp than with the lower bound estimates, both cross sectionally and over time.

Suggested Citation

  • Rafael Carranza, 2020. "Upper and lower bound estimates of inequality of opportunity: A cross-national comparison for Europe," Working Papers 511, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2020-511
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    Cited by:

    1. Dai, Xinchen & Li, Jing, 2021. "Inequality of opportunity in China: Evidence from pseudo panel data," China Economic Review, Elsevier, vol. 68(C).
    2. Jenkins, Stephen P., 2022. "Getting the Measure of Inequality," IZA Discussion Papers 14996, Institute of Labor Economics (IZA).
    3. Paolo Brunori & Paul Hufe & Daniel Mahler, 2023. "The roots of inequality: estimating inequality of opportunity from regression trees and forests," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(4), pages 900-932, October.
    4. Brunori, Paolo & Hufe, Paul & Mahler, Daniel Gerszon, 2021. "The Roots of Inequality: Estimating Inequality of Opportunity from Regression Trees and Forests," IZA Discussion Papers 14689, Institute of Labor Economics (IZA).
    5. Rafael Carranza, 2020. "Inequality of Outcomes, Inequality of Opportunity, and Economic Growth," Working Papers 534, ECINEQ, Society for the Study of Economic Inequality.
    6. Brunori, Paolo & Hufe, Paul & Mahler, Daniel, 2023. "The roots of inequality: estimating inequality of opportunity from regression trees and forests," LSE Research Online Documents on Economics 118220, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    Circumstances; equality of opportunity; equivalized household income; inequality; MLD index; upper bound estimate.;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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