Playing the birth lottery in Europe

We analyse the extent to which a person’s country of origin -alongside other factors beyond their control, such as their parents’ education and occupation- are predictive of adult incomes in Europe. Interpreting the joint predictive power of inherited circumstances as a measure of inequality of opportunity, we employ data-driven methods to estimate inequality of opportunity for household disposable incomes, treating Europe as a single entity. To ensure representativeness, we combine data from EUROSTAT and three different household surveys to construct a sample that represents the population of Europe, accounting for country-of-birth population shares within countries. We estimate overall inequality in Europe at 39 Gini points in 2019, with inequality predicted by ascriptive characteristics accounting for a full 23 Gini points. The country where a person was born accounts for 64% of the latter figure, emerging as the most significant predictor compared to other factors such as parental occupation (26%) and parental education (9%). The level of inequality of opportunity observed in Europe as a whole is comparable to that in China and India and significantly higher than estimates for the United States.