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Equality of Opportunity and the Distribution of Long-Run Income in Sweden

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Author Info

  • Björklund, Anders

    ()
    (SOFI, Stockholm University)

  • Jäntti, Markus

    ()
    (SOFI, Stockholm University)

  • Roemer, John E.

    ()
    (Yale University)

Abstract

Equality of opportunity is an ethical goal with almost universal appeal. The interpretation taken here is that a society has achieved equality of opportunity if it is the case that what individuals accomplish, with respect to some desirable objective, is determined wholly by their choices and personal effort, rather than by circumstances beyond their control. We use data for Swedish men born between 1955 and 1967 for whom we measure the distribution of long-run income, as well as several important background circumstances, such as parental education and income, family structure and own IQ before adulthood. We address the question: in Sweden, given its present constellation of social policies and institutions, to what extent is existing income inequality due to circumstances, as opposed to 'effort'? Our results suggest that several circumstances, importantly both parental income and own IQ, are important for long-run income inequality, but that variations in individual effort account for the most part of that inequality.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5466.

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Length: 34 pages
Date of creation: Jan 2011
Date of revision:
Handle: RePEc:iza:izadps:dp5466

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Keywords: inequality; family background; equality of opportunity; long-run income;

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References

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  1. François Bourguignon & Francisco H. G. Ferreira & Marta Menéndez, 2007. "Inequality Of Opportunity In Brazil," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(4), pages 585-618, December.
  2. Anders Bjorklund & Markus Jantti & Gary Solon, 2007. "Nature and Nurture in the Intergenerational Transmission of Socioeconomic Status: Evidence from Swedish Children and Their Biological and Rearing Parents," NBER Working Papers 12985, National Bureau of Economic Research, Inc.
  3. Lefranc, Arnaud & Pistolesi, Nicolas & Trannoy, Alain, 2009. "Equality of opportunity and luck: Definitions and testable conditions, with an application to income in France," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1189-1207, December.
  4. Keane, Michael P. & Roemer, John E., 2009. "Assessing policies to equalize opportunity using an equilibrium model of educational and occupational choices," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 879-898, August.
  5. Bratsberg,Bernt & Røed, Knut & Raaum, Oddbjørn & Naylor, Robin & Jäntti, Markus & Eriksson, Tor & Österbacka, Eva, 2007. "Nonlinearities in Intergenerational Earnings Mobility : Consequences for Cross-Country Comparisons," The Warwick Economics Research Paper Series (TWERPS) 782, University of Warwick, Department of Economics.
  6. Björklund, Anders & Jäntti, Markus & Lindquist, Matthew J., 2007. "Family Background and Income during the Rise of the Welfare State: Brother Correlations in Income for Swedish Men Born 1932-1968," IZA Discussion Papers 3000, Institute for the Study of Labor (IZA).
  7. Fleurbaey, Marc, 2012. "Fairness, Responsibility, and Welfare," OUP Catalogue, Oxford University Press, number 9780199653591, Octomber.
  8. Björklund, Anders & Roine, Jesper & Waldenström, Daniel, 2008. "Intergenerational Top Income Mobility in Sweden: A Combination of Equal Opportunity and Capitalistic Dynasties," IZA Discussion Papers 3801, Institute for the Study of Labor (IZA).
  9. Daniele Checchi & Vito Peragine, 2010. "Inequality of opportunity in Italy," Journal of Economic Inequality, Springer, vol. 8(4), pages 429-450, December.
  10. Anders Bohlmark & Matthew J. Lindquist, 2006. "Life-Cycle Variations in the Association between Current and Lifetime Income: Replication and Extension for Sweden," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 879-900, October.
  11. Ricardo Paes de Barros & Francisco H. G. Ferreira & Jose R. Molinas Vega & Jaime Saavedra Chanduvi, 2009. "Measuring Inequality of Opportunities in Latin America and the Caribbean," World Bank Publications, The World Bank, number 2580, October.
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Cited by:
  1. Jean-François Carpantier & Christelle Sapata, 2012. "An ex-post view of inequality of opportunity in France and its regions," Working Papers wpdea1211, Department of Applied Economics at Universitat Autonoma of Barcelona.
  2. Judith Niehues & Andreas Peichl, 2011. "Lower and upper bounds of unfair inequality: Theory and evidence for Germany and the US," Working Papers 216, ECINEQ, Society for the Study of Economic Inequality.
  3. Aitor Calo-Blanco & J. García-Pérez, 2014. "On the welfare loss caused by inequality of opportunity," Journal of Economic Inequality, Springer, vol. 12(2), pages 221-237, June.
  4. RAMOS, Xavier & VAN DE GAER, Dirk, 2012. "Empirical approaches to inequality of opportunity: principles, measures, and evidence," CORE Discussion Papers 2012026, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. CARPANTIER, Jean-François & SAPATA, Christelle, 2012. "Unfair inequalities in France: A regional comparison," CORE Discussion Papers 2012038, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  6. Vito Peragine, 2011. "Review of “Measuring inequality of opportunities in Latin America and the Caribbean” by Ricardo Paes de Barros, Francisco H. G. Ferreira, José R. Molinas Vega, and Jaime Saavedra Chanduvi , World," Journal of Economic Inequality, Springer, vol. 9(1), pages 137-143, March.

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