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Economic growth and equality of opportunity

Author

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  • V. Peragine

    () (Università di Bari)

  • F. Palmisano

    () (Università di Bari)

  • P. Brunori

    () (Università di Bari)

Abstract

In this paper we argue that a better understanding of the relationship between inequality and growth can be obtained by shifting the analisys from the space of final achievements to the space of opportunities. To this end, we introduce the Opportunity Growth Incidence Curve, that can be used to evaluate the income dynamics of specific groups of the population and to infer the role of growth in the evolution of inequality of opportunity over time. By employng a rank dependent social welfare function we provide a rigorous normative justification for the use of the OGIC: we obtain suitable dominance conditions and we show how they can be interpreted in terms of OGIC dominance. We also propose an index that can be used to measure the impact of growth in terms of ooopotunity redistribution. Finally, we provide two empirical illustrations, for Italy and for Brasil, which show the potentials of the tools we have introduced.

Suggested Citation

  • V. Peragine & F. Palmisano & P. Brunori, 2011. "Economic growth and equality of opportunity," SERIES 0037, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Oct 2011.
  • Handle: RePEc:bai:series:economia-series37
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Paolo Brunori & Flaviana Palmisano & Vito Peragine, 2014. "Income taxation and equity: New dominance criteria and an application to Romania," Working Papers 348, ECINEQ, Society for the Study of Economic Inequality.
    2. Francisco H. G. Ferreira & Vito Peragine, 2015. "Equality of opportunity: Theory and evidence," Working Papers 359, ECINEQ, Society for the Study of Economic Inequality.
    3. Vito Peragine & Flaviana Palmisano & Paolo Brunori, 2014. "Economic Growth and Equality of Opportunity," World Bank Economic Review, World Bank Group, vol. 28(2), pages 247-281.
    4. Herrera Jiménez, Alejandro & Villegas Quino, Horacio, 2016. "Circumstances and Determination of Individual Outcomes in Bolivia: Family Background and Equality of Opportunities (2003-2013)," Documentos de trabajo 1/2016, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
    5. Rougier, Eric, 2016. "“Fire in Cairo”: Authoritarian–Redistributive Social Contracts, Structural Change, and the Arab Spring," World Development, Elsevier, vol. 78(C), pages 148-171.
    6. Rajius Idzalika & Maria C. Lo Bue, 2016. "Opportunities in education: are factors outside individual responsibility really persistent? Evidence from Indonesia, 1997-2007," Working Papers 397, ECINEQ, Society for the Study of Economic Inequality.
    7. Greenstein Joshua, 2015. "New Patterns of Structural Change and Effects on Inclusive Development: A Case Study of South Africa and Brazil," WIDER Working Paper Series 006, World Institute for Development Economic Research (UNU-WIDER).
    8. Marc Fleurbaey & Vito Peragine & Xavier Ramos, 2017. "Ex post inequality of opportunity comparisons," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(3), pages 577-603, December.
    9. Tiwari,Sailesh & Lara Ibarra,Gabriel & Narayan,Ambar, 2015. "How unfair is the inequality of wage earnings in Russia ? estimates from panel data," Policy Research Working Paper Series 7291, The World Bank.
    10. Francesco Farina, 2016. "The Path Dependency of Poverty Reduction Policies," HISTORY OF ECONOMIC THOUGHT AND POLICY, FrancoAngeli Editore, vol. 2016(1), pages 21-42.
    11. Brunori Paolo & Palmisano Flaviana & Peragine Vito, 2015. "Inequality of Opportunity During the Great Recession in Uganda," WIDER Working Paper Series 039, World Institute for Development Economic Research (UNU-WIDER).
    12. Michal Brzezinski, 2017. "Income inequality and the Great Recession in Central and Eastern Europe," Working Papers 2017-28, Faculty of Economic Sciences, University of Warsaw.
    13. Flaviana Palmisano, 2012. "The distributional incidence of growth: a non-anonymous and rank dependent approach," SERIES 0039, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Jul 2012.
    14. Paolo Li Donni & Juan Rodríguez & Pedro Rosa Dias, 2015. "Empirical definition of social types in the analysis of inequality of opportunity: a latent classes approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(3), pages 673-701, March.

    More about this item

    Keywords

    INCOME INEQUALITY; INEQUALITY OF OPPORTUNITY; ECONOMIC GROWTH;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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