IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper

GINI DP 34: Bounds of Unfair Inequality of Opportunity: Theory and Evidence for Germany and the US

  • Niehues, J. (Judith)
  • Andreas Peichl

    ()

    (Institute for the Study of Labor (IZA))

Previous estimates of inequality of opportunity (IOp) are lower bounds because of the unobservability of the full set of endowed characteristics beyond the sphere of individual responsibility. Knowing the true size of unfair IOp, however, is important for the acceptance of (some) inequality and the design of redistributive policies as underestimating the true amount of IOp might lead to too little redistribution. This paper is the first to suggest an upper bound estimator. We illustrate our approach by comparing Germany and the US based on harmonized micro data. We find significant, sizeable and robust differences between lower and upper bound estimates – both for gross and net earnings based on either periodical or permanent income – for both countries. We discuss the cross-country differences and (surprising) similarities in IOp in the light of differences in social mobility and persistence. JEL Codes: D63, H2, J62, J7

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.uva-aias.net/uploaded_files/publications/DP34-Nieheus,Peichl.pdf
Download Restriction: no

Paper provided by AIAS, Amsterdam Institute for Advanced Labour Studies in its series GINI Discussion Papers with number 34.

as
in new window

Length:
Date of creation: May 2012
Date of revision:
Handle: RePEc:aia:ginidp:34
Contact details of provider: Postal:
Nieuwe Prinsengracht 130, 1018 VZ Amsterdam

Phone: +31-20-5254199
Fax: +31-20-5254301
Web page: http://www.uva-aias.net
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Mathias Dolls & Clemens Fuest & Andreas Peichl, 2010. "Automatic Stabilizers and Economic Crisis: US vs. Europe," Cologne Graduate School Working Paper Series 01-02, Cologne Graduate School in Management, Economics and Social Sciences.
  2. Rolf Aaberge & Magne Mogstad & Vito Peragine, 2010. "Measuring long-term inequality of opportunity," Discussion Papers 620, Statistics Norway, Research Department.
  3. Thomas Piketty, 1995. "Social Mobility and Redistributive Politics," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 551-584.
  4. Ok, Efe A. & Foster, James, 1997. "Lorenz Dominance and the Variance of Logarithms," Working Papers 97-22, C.V. Starr Center for Applied Economics, New York University.
  5. Roemer, John E. & Aaberge, Rolf & Colombino, Ugo & Fritzell, Johan & Jenkins, Stephen P. & Marx, Ive & Page, Marianne & Pommer, Evert & Ruiz-Castillo, Javier & San Segundo, Maria Jesus & Tranaes, Torb, 2000. "To what extent do fiscal regimes equalize opportunities for income acquisition among citizens?," ISER Working Paper Series 2000-19, Institute for Social and Economic Research.
  6. Dunnzlaff, Lina & Neumann, Dirk & Niehues, Judith & Peichl, Andreas, 2010. "Equality of Opportunity and Redistribution in Europe," IZA Discussion Papers 5375, Institute for the Study of Labor (IZA).
  7. Francois Bourguignon & Francisco H.B. Ferreira & Marta Menéndez, 2005. "Inequality of Opportunity in Brazil," Ibero America Institute for Econ. Research (IAI) Discussion Papers 133, Ibero-America Institute for Economic Research.
  8. Angeletos, George-Marios & Alesina, Alberto, 2005. "Fairness and Redistribution," Scholarly Articles 4553009, Harvard University Department of Economics.
  9. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2008. "Trends in U.S. Wage Inequality: Revising the Revisionists," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 300-323, May.
  10. Blackburn, McKinley L., 2007. "Estimating wage differentials without logarithms," Labour Economics, Elsevier, vol. 14(1), pages 73-98, January.
  11. Almås, Ingvild & Cappelen, Alexander W. & Lind, Jo Thori & Sørensen, Erik Ø. & Tungodden, Bertil, 2011. "Measuring unfair (in)equality," Journal of Public Economics, Elsevier, vol. 95(7), pages 488-499.
  12. Thomas Piketty & Emmanuel Saez, 2006. "How Progressive is the U.S. Federal Tax System? A Historical and International Perspective," NBER Working Papers 12404, National Bureau of Economic Research, Inc.
  13. Christian Dustmann & Johannes Ludsteck & Uta Schönberg, 2009. "Revisiting the German Wage Structure," The Quarterly Journal of Economics, Oxford University Press, vol. 124(2), pages 843-881.
  14. Fong, Christina, 2001. "Social preferences, self-interest, and the demand for redistribution," Journal of Public Economics, Elsevier, vol. 82(2), pages 225-246, November.
  15. Björklund, Anders & Roine, Jesper & Waldenström, Daniel, 2008. "Intergenerational Top Income Mobility in Sweden – Capitalist Dynasties in the Land of Equal Opportunity?," Working Paper Series 775, Research Institute of Industrial Economics, revised 27 Sep 2010.
  16. Peichl, Andreas & Schneider, Hilmar & Siegloch, Sebastian, 2010. "Documentation IZAΨMOD: The IZA Policy SImulation MODel," IZA Discussion Papers 4865, Institute for the Study of Labor (IZA).
  17. Van Kerm, Philippe, 2003. "What Lies Behind Income Mobility? Reranking and Distributional Change in Belgium, Western Germany and the USA," IRISS Working Paper Series 2003-03, IRISS at CEPS/INSTEAD.
  18. Foster, James E. & Shneyerov, Artyom A., 2000. "Path Independent Inequality Measures," Journal of Economic Theory, Elsevier, vol. 91(2), pages 199-222, April.
  19. Miles Corak & Andrew Heisz, 1999. "The Intergenerational Earnings and Income Mobility of Canadian Men: Evidence from Longitudinal Income Tax Data," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 504-533.
  20. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-25, April.
  21. Erwin OOGHE & Andreas PEICHL, 2010. "Fair and efficient taxation under partial control: theory and evidence," Working Papers Department of Economics ces10.32, KU Leuven, Faculty of Economics and Business, Department of Economics.
  22. Arnaud Lefranc & Nicolas Pistolesi & Alain Trannoy, 2006. "Inequality of opportunities vs. inequality of outcomes: Are Western societies all alike?," Working Papers 54, ECINEQ, Society for the Study of Economic Inequality.
  23. Marc Fleurbaey & Vito Peragine, 2009. "Ex ante versus ex post equality of opportunity," Working Papers 141, ECINEQ, Society for the Study of Economic Inequality.
  24. repec:dau:papers:123456789/1552 is not listed on IDEAS
  25. Nicolas Pistolesi, 2009. "Inequality of opportunity in the land of opportunities, 1968–2001," Journal of Economic Inequality, Springer, vol. 7(4), pages 411-433, December.
  26. Daniele Checchi & Vito Peragine & Laura Serlenga, 2010. "Fair and unfair income inequalities in Europe," CHILD Working Papers wp06_10, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  27. Fleurbaey Marc, 1995. "Three Solutions for the Compensation Problem," Journal of Economic Theory, Elsevier, vol. 65(2), pages 505-521, April.
  28. Ferreira , Francisco H. G. & Gignoux, Jeremie, 2008. "The measurement of inequality of opportunity : theory and an application to Latin America," Policy Research Working Paper Series 4659, The World Bank.
  29. Fleurbaey, Marc, 2012. "Fairness, Responsibility, and Welfare," OUP Catalogue, Oxford University Press, number 9780199653591, May.
  30. 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.
  31. Daniele Checchi & Vito Peragine, 2010. "Inequality of opportunity in Italy," Journal of Economic Inequality, Springer, vol. 8(4), pages 429-450, December.
  32. Björklund, Anders & Jäntti, Markus & Lindquist, Matthew J., 2009. "Family background and income during the rise of the welfare state: Brother correlations in income for Swedish men born 1932-1968," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 671-680, June.
  33. Kurt Devooght, 2008. "To Each the Same and to Each his Own: A Proposal to Measure Responsibility-Sensitive Income Inequality," Economica, London School of Economics and Political Science, vol. 75(298), pages 280-295, 05.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:aia:ginidp:34. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiemer Salverda)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.