Inequality of Opportunity in Brazil

François Bourguignon, Francisco Ferreira and Marta Menéndez

No 133, Ibero America Institute for Econ. Research (IAI) Discussion Papers from Ibero-America Institute for Economic Research

Abstract: This paper proposes a method to decompose earnings inequality into a component due to unequal opportunities and a residual term. Drawing on the distinction between ‘circumstance’ and ‘effort’ variables in John Roemer’s work on equality of opportunity, we associate inequality of opportunities with the inequality attributable to circumstances which lie beyond the control of the individual – such as her family background, her race and the region where she was born. We interpret the decomposition as establishing a lower bound on the contribution of opportunities to earnings inequality. We further decompose the effect of opportunities into a direct effect on earnings and an indirect component which works through the “effort” variables. The decomposition is applied to the distributions of male and female earnings in Brazil, in 1996. While the residual term is large, observed circumstances nevertheless account for around a quarter of the value of the Theil index. Parental education is by far the most important circumstance affecting earnings, dwarfing the effects of race and place of birth.

Keywords: Inequality of opportunity; earnings inequality; intergenerational mobility (search for similar items in EconPapers)
JEL-codes: D31 D63 J62 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2005-11-18
New Economics Papers: this item is included in nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
http://www2.vwl.wiso.uni-goettingen.de/ibero/working_paper_neu/DB133.pdf (application/pdf)

Related works:
Journal Article: INEQUALITY OF OPPORTUNITY IN BRAZIL (2007)
Working Paper: Inequality of opportunity in Brazil (2007)
Working Paper: Inequality of opportunity in Brazil (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:got:iaidps:133

Access Statistics for this paper

More papers in Ibero America Institute for Econ. Research (IAI) Discussion Papers from Ibero-America Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Sabine Jaep ().