Equality of Opportunity versus Equality of Opportunity Sets

Ooghe, Erwin; Schokkaert, Erik; gaer, Dirk Van de

doi:10.1007/s00355-006-0165-4

“…Also Roemer (1998). 2 This condition is consistent with a literalist de nition of inequality of opportunity by Roemer (1998, p. 15-6) as well as with Van De Gaer's rule (Ooghe et al, 2007). It is also consistent with Fleurbaey's concept of circumstance neutralization (Fleurbaey, 2008, p. 25).…”

Section: Introductionsupporting

confidence: 70%

Measuring Group Disadvantage with Inter-Distributional Inequality Indices: A Critical Review and Some Amendments to Existing Indices

Yalonetzky

¹

2011

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Gaston Yalonetzky University of LeedsAbstract A long literature on inter-distributional inequality (IDI) has developed statistical tools for measuring the extent of inequality between two groups (e.g. men versus women). Firstly, I introduce the property of group-specific disadvantage focus (GDF). Indices satisfying this property are only sensitive to inequalities that are disadvantageous to one specific group. Then the paper reviews some of the most prominents IDI indices proposed in the last four decades. The assessment focuses on whether these indices satisfy GDF and, if not, how they react to inequalities that are disadvantageous to different groups. I also discuss whether these indices are informative, or not, regarding other interesting features related to IDI comparisons, e.g. distributional equality, absence of distributional overlap and presence of first-order stochastic dominance. Finally, I propose amendments to several of these indices in order to render them in fulfillment of GDF and more informative on the mentioned distributional features.Paper submitted to the special issue The Measurement of Inequality and Well-Being: New Perspectives JEL D30, J71

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“…A widely accepted conception of equality of opportunity is about the implementation of a meritocracy: only merits matter (see, for example, Lucas, 1995). A second conception, which has been developed over the last decade (see, among others, Roemer, 1993, 1998, Van de Gaer, 1993, Fleurbaey, 1995, Roemer et al, 2003, RuizCastillo, 2003, Peragine, 2002, Lefranc et al, 2006aand 2006b, MorenoTernero, 2007, Ooghe et al, 2007, Fleurbaey and Maniquet, 2007, and Rodríguez, 2009 We focus in the second approach but first we provide some notation and definitions.…”

Section: Inequality Of Income and Opportunity Measurementmentioning

confidence: 99%

Inequality of opportunity and growth

Marrero

¹

,

Rodríguez

²

2013

Journal of Development Economics

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Theoretical models and empirical studies exploring the relationship between income inequality and growth reach a disappointing inconclusive answer. We postulate in this paper that one reason for this inconclusive result is that income inequality consist at least in two different sorts of inequality, inequality of opportunity and effort. These two types of inequality would affect growth through opposite channels. As a result, the relationship between income inequality and growth could be positive or negative depending on which kind of inequality is more relevant. We test this proposal using depurated data of the PSID database for 24 US states from 1980 to 2000. We estimate regressions that relate growth with overall income inequality, inequality of opportunity and other widespread used control variables. We find robust support for a negative relationship between inequality of opportunity and growth and a positive relationship between growth and income inequality.JEL Classification: D63, H00.Key Words: income inequality; inequality of opportunity; economic growth. INTRODUC TIONAn upsurge literature on income inequality and growth has emerged over the last two decades. The development of endogenous growth theory has provided the tools to handle the relationships between income inequality and economic growth within a dynamic equilibrium setting. Relaxing the representative-agent assumption raises two main questions. The first concerns the effects of income and wealth inequality on growth. The second addresses the reverse causation from growth to inequality, and disputes about the Kuznets (1955) hypothesis, according to which development and growth should eventually reduce income inequality.We concentrate on the first channel of influence, that is, on the effects of income inequality on growth. In this respect, two sets of growth models have been proposed in the literature: models where inequality is necessary for growth and models where inequality is harmful for growth. As it will become clear in the next section, the prevalence of a positive or negative relationship between income inequality and growth from a theoretical perspective is not possible since income inequality may affect economic growth in both directions through many different channels. For example, wealth and human capital heterogeneity across individuals produces a negative relationship between income inequality and growth because capital markets are imperfect. Meanwhile, income inequality may courage people s effort and, therefore, economic growth. In this manner, opposite forces give rise to a confusing picture of the relationship between economic growth and inequality. Worst still, the empirical evidence on the link from initial income inequality to future growth is mixed. Thus, there is a general inconclusiveness of cross-sectional and panel data studies of the relationship between income inequality and growth. In this respect, Ehrhart (2009) acknowledges in a recent survey on this topic that the overall rather disappointing econometric ...

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“…On this basis, a number of authors have used moments, or other attributes, of the type-specific distribution function Fi (x) to evaluate the type's opportunity sets. See, for example, van de Gaer (1993), Bossert (1997) and Ooghe et al (2007). Most commonly, the mean income of type i has been used to value opportunity sets, and therefore to rank types.…”

Section: The Basic Set Upmentioning

confidence: 99%

Opportunity-Sensitive Poverty Measurement

Brunori¹,

Ferreira²,

Lugo³

et al. 2013

Policy Research Working Papers

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. We axiomatically characterize two classes of poverty measures which are sensitive to inequality of opportunity -one a strict subset of the other. The proposed indices are sensitive not only to income shortfalls from the poverty line, but also to differences in opportunities faced by people with different pre-determined characteristics, such as race or family background. Dominance conditions are established for each class of measures, and a subfamily of scalar indices, based on a rank-dependent aggregation of type-specific poverty levels, is also introduced. Using household survey data from eighteen European countries in 2005, we find substantial differences in country rankings based on standard FGT indices and on the new opportunity-sensitive indices. Cross-country differences in opportunity-sensitive poverty are decomposed into a level effect; a distribution effect; and a population composition effect.JEL Classification: D31, D63, J62

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Equality of Opportunity versus Equality of Opportunity Sets

Cited by 71 publications

References 22 publications

Measuring Group Disadvantage with Inter-Distributional Inequality Indices: A Critical Review and Some Amendments to Existing Indices

Measuring Group Disadvantage with Inter-Distributional Inequality Indices: A Critical Review and Some Amendments to Existing Indices

Inequality of opportunity and growth

Opportunity-Sensitive Poverty Measurement

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