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Economic growth and equality of opportunity

  • V. Peragine

    ()

    (Università di Bari)

  • F. Palmisano

    ()

    (Università di Bari)

  • P. Brunori

    ()

    (Università di Bari)

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.

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Paper provided by Dipartimento di Scienze Economiche e Metodi Matematici - Università di Bari in its series series with number 0037.

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Length: 1120
Date of creation: Oct 2011
Date of revision: Oct 2011
Handle: RePEc:bai:series:wp0037
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  18. 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).
  19. Rolf Aaberge & Magne Mogstad & Vito Peragine, 2010. "Measuring long-term inequality of opportunity," Discussion Papers 620, Statistics Norway, Research Department.
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  38. Nanak Kakwani & Hyun H. Son, 2008. "Poverty Equivalent Growth Rate," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(4), pages 643-655, December.
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