Long-term evolution of inequality of opportunity

Maurizio Bussolo, Daniele Checchi and Vito Peragine

No 485, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: The main goal of this paper is to document and analyze the long-term evolution of inequality of opportunity and thus extend the recent empirical literature, which is mainly concerned with its measurement at a specific point in time. Using repeated cross-section surveys for five European countries (France, Germany, Great Britain, Italy, and Switzerland), the evolution of inequality of opportunity is measured for a period of about two decades for the whole populations, as well as for different birth cohorts. Relative inequality of opportunity represents an important portion of total income inequality, with values ranging from 30 to 50 percent according to the standard deviation of logs (and reaching a lower share in case of mean log deviation) and, for all the countries, it shows a stable or declining time trend. When the birth cohorts are followed across time, inequality of opportunity decreases with age: the effect of circumstances seems to weaken over the life cycle. This is a quite different age profile from that of inequality of outcomes (income or consumption), which generally increases with age. A decomposition of the relative inequality of opportunity allows highlighting some key drivers of its time evolution. In all the countries, there has been a clear enhancement of equality of educational opportunity (as captured by a downward trending intergenerational education persistence) and a reduction of the returns to education. However, for some countries, notably Italy, these trends have failed to translate into decreasing inequality of opportunity in the income distribution because of the increasing role of parental networking (an additional channel through which parental background affects the incomes of offspring).

Keywords: Inequality of Opportunity; Decomposition methods; Education mobility; Returns to Education; Family Networking; Cohort Analysis. (search for similar items in EconPapers)
JEL-codes: D31 D63 E24 I24 J62 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2019-01
New Economics Papers: this item is included in nep-eur and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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http://www.ecineq.org/milano/WP/ECINEQ2019-485.pdf (application/pdf)

Related works:
Working Paper: Long-Term Evolution of Inequality of Opportunity (2020)
Working Paper: Long-Term Evolution of Inequality of Opportunity (2020)
Working Paper: Long-Term Evolution of Inequality of Opportunity (2020)
Working Paper: Long-Term Evolution of Inequality of Opportunity (2019)
Working Paper: The long term evolution of inequality of opportunity (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:inq:inqwps:ecineq2019-485

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