Inequality of opportunities vs. inequality of outcomes: Are Western societies all alike?

Arnaud Lefranc (), Nicolas Pistolesi () and Alain Trannoy ()

No 54, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: This paper analyzes the relationship between income inequality and inequality of opportunities for income acquisition in nine developed countries during the nineties. We develop a new definition of equality of opportunity and show how it can be implemented empirically. Equality of opportunity is defined as the situation where income distributions conditional on social origin cannot be ranked according to stochastic dominance criteria. Stochastic dominance is assessed using non-parametric statistical tests. We measure social origin by parental education and occupation and use national household surveys to assess inequality of income and opportunities. USA and Italy show up as the most unequal countries both in terms of outcome and opportunity. At the opposite extreme, income distributions conditional on social origin are very close in Scandinavian countries even before any redistributive policy. The analysis highlights that inequality of outcome and inequality of opportunity can sometimes lead to different pictures. For instance, France and Germany experience a similar level of inequality of income but the former country is much more unequal than the latter from the point of view of equality of opportunity. Differences in rankings according to inequality of outcome and inequality of opportunity underscore the importance of the policymaker's choice of the conception of equality to promote.

Keywords: Equality of opportunity; Income inequality; Income distribution; Lorenz dominance. (search for similar items in EconPapers)
JEL-codes: D61 D63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec
Date: 2006
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Related works:
Working Paper: Inequality of Opportunities vs Inequality of Outcomes: are western societies all alike? (2005)
Journal Article: INEQUALITY OF OPPORTUNITIES VS. INEQUALITY OF OUTCOMES: ARE WESTERN SOCIETIES ALL ALIKE? (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:inq:inqwps:ecineq2006-54

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