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Lower and Upper Bound Estimates of Inequality of Opportunity for Emerging Economies

Paul Hufe (), Andreas Peichl () and Daniel Weishaar ()
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Paul Hufe: University of Bristol
Daniel Weishaar: LMU Munich

No 14680, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Equality of opportunity is an important normative ideal of distributive justice. In spite of its wide acceptance and economic relevance, standard estimation approaches suffer from data limitations that can lead to both downward and upward biased estimates of inequality of opportunity. These shortcomings may be particularly pronounced for emerging economies in which comprehensive household survey data of sufficient sample size is often unavailable. In this paper, we assess the extent of upward and downward bias in inequality of opportunity estimates for a set of twelve emerging economies. Our findings suggest strongly downward biased estimates of inequality of opportunity in these countries. To the contrary, there is little scope for upward bias. By bounding inequality of opportunity from above, we address recent critiques that worry about the prevalence of downward biased estimates and the ensuing possibility to downplay the normative significance of inequality.

Keywords: equality of opportunity; inequality; emerging economies (search for similar items in EconPapers)
JEL-codes: D31 D63 I32 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2021-08
New Economics Papers: this item is included in nep-dev and nep-isf
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