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Inequality of Opportunity in Developing countries: Does the income aggregate matter?

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  • Ana Suárez Álvarez
  • Ana Jesús López Menéndez

Abstract

The aim of this paper is to shed some light on the behaviour of Inequality of Opportunity (IOp henceforth) in developing countries. The analysis is carried out using microdata collected by national surveys and harmonised by the Luxembourg Income Study (LIS). The LIS database incorporates a wide variety of personal harmonised variables, which allow us to made cross-country comparisons for developing countries. More specifically, we analyse six countries: Brazil, Egypt, Guatemala, India, Peru and South Africa and the periods of time covered vary from 2004 to 2014. Looking back to Amartya Sen´s famous question “Equality of what?” we compare IOp with economic inequality to obtain relative indicators of inequality of opportunity for each country analysed. Moreover, we use several indicators of income and consumption to assess if different aggregates lead to different conclusions both in the evolution of IOp and overall inequality and in the relative weights of the circumstances that conform IOp. In particular, we analyse IOp and Inequality for five different income aggregates: Equivalised Disposable Income using the OECD-modified scale, Personal Income, Labour Personal Income, Consumption and Monetary Consumption. We find that the use of an aggregate is not as important as it at first seems, leading in most cases to the same conclusions.

Suggested Citation

  • Ana Suárez Álvarez & Ana Jesús López Menéndez, 2018. "Inequality of Opportunity in Developing countries: Does the income aggregate matter?," LIS Working papers 739, LIS Cross-National Data Center in Luxembourg.
  • Handle: RePEc:lis:liswps:739
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    References listed on IDEAS

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    2. repec:dau:papers:123456789/1552 is not listed on IDEAS
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    Cited by:

    1. Akanksha Choudhary & Gowtham T. Muthukkumaran & Ashish Singh, 2019. "Inequality of Opportunity in Indian Women," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 145(1), pages 389-413, August.
    2. Caroline Krafft & Elizabeth E. Davis, 2021. "The Arab inequality puzzle: the role of income sources in Egypt and Tunisia," Middle East Development Journal, Taylor & Francis Journals, vol. 13(1), pages 1-26, January.

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