Inequality of outcomes vs. inequality of opportunities in a developing country. An exploratory analysis for Chile

Javier Nunez and Andrea Tartakowsky

Estudios de Economia, 2007, vol. 34, issue 2 Year 2007, 185-202

Abstract: We apply a variation of Bourguignon, Meléndez and Ferreira (2005) methodology to examine the extent to which income inequality is associated with the inequality of observed exogenous circumstances of origin that determine individuals’ “opportunities” to pursue their chosen life plans. We find that equalizing a set of observed circumstances of origin across individuals such as parents’ schooling, parents’s stability of employment, father’s age, household size and growing in a single vs a bi-parental household reduces income inequality, but in a small margin, in the range of 8 to 13 points of the Gini coefficient, about a 15-20 per cent drop. These results are similar to those obtained by Bourguignon et al. (2005) for Brazil, although the dataset and the set of observed circumstances are partially different. These results suggest that a significant part of income inequality may be associated with unobserved heterogeneity across individuals unrelated to circumstances of origin, such as preferences, eff

Keywords: Income inequality; equality of opportunities. (search for similar items in EconPapers)
JEL-codes: D31 D63 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (13)

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