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Inequality Of Opportunity In Brazil

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  • François Bourguignon
  • Francisco H. G. Ferreira
  • Marta Menéndez

Abstract

This paper proposes a measure of the contribution of unequal opportunities to earnings inequality. Drawing on the distinction between "circumstance" and "effort" variables in John Roemer's work on equality of opportunity, we associate inequality of opportunities with five observed circumstances which lie beyond the control of the individual-father's and mother's education; father's occupation; race; and region of birth. The paper provides a range of estimates of the importance of these opportunity-forming circumstances in accounting for earnings inequality in one of the world's most unequal countries. We also 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 distribution of male earnings in urban Brazil, in 1996. The five observed circumstances are found to account for between 10 and 37 percent of the Theil index, depending on cohort and allowing for the possibility of biased coefficient estimates due to unobserved correlates. On average, 60 percent of this impact operates through the direct effect on earnings. Parental education is the most important circumstance affecting earnings, but the occupation of the father and race also play a role. Copyright � 2007 The Authors; Journal compilation � International Association for Research in Income and Wealth 2007.

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Bibliographic Info

Article provided by International Association for Research in Income and Wealth in its journal Review of Income and Wealth.

Volume (Year): 53 (2007)
Issue (Month): 4 (December)
Pages: 585-618

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Handle: RePEc:bla:revinw:v:53:y:2007:i:4:p:585-618

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  1. Thomas Piketty, 1994. "Social Mobility and Redistributive Politics," Working papers 94-15, Massachusetts Institute of Technology (MIT), Department of Economics.
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  14. Vito Peragine, 2004. "Ranking Income Distributions According to Equality of Opportunity," Journal of Economic Inequality, Springer, vol. 2(1), pages 11-30, April.
  15. Francisco H. G. Ferreira & Peter Lanjouw & Marcelo Côrtes Neri, 2003. "A Robust Poverty Profile for Brazil Using Multiple Data Sources," Revista Brasileira de Economia, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 57(1), pages 59-92, January.
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    by Erik Figueiredo in Moral Hazard on 2010-09-24 19:31:00
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