This paper departs from John Roemer's theory of equality of opportunities. We seek to determine what part of observed outcome inequality may be attributed to differences in observed 'circumstances', including family background, and what part is due to 'personal efforts'. We use a micro-econometric technique to simulate what the distribution of outcomes would look like if 'circumstances' were the same for everybody. This technique is applied to Brazilian data from the 1996 household survey, both for earnings and for household incomes. It is shown that observed circumstances are a major source of outcome inequality in Brazil, probably more so than in other countries for which information is available. Nevertheless, the level of inequality after observed circumstances are equalized remains very high in Brazil.
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Length: 38 pages Date of creation: 01 Nov 2003 Date of revision: Handle: RePEc:wdi:papers:2003-630
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Find related papers by JEL classification: D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion
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Claudia Biancotti & Giovanni D'Alessio, 2007.
"Inequality and Happiness,"
Working Papers
75, ECINEQ, Society for the Study of Economic Inequality.
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