Inherited inequality and the distribution of opportunities in the USA, China, India and South Africa

Researchers have sought to quantify the extent of inequality that is inherited from previous generations or factors that are predetermined at birth in multiple ways, including a large body of work on intergenerational mobility and inequality of opportunity. Many of the most frequently used approaches to measuring mobility or inequality of opportunity fit within a general framework that involves, as a first step, an estimation of the extent to which inherited personal characteristics can predict current incomes. We suggest a new approach, within that broad framework, that is sensitive to differences across the entire conditional distributions of relevant population subgroups, rather than just in their means. Sensitivity to differences in higher moments of the conditional distributions allows for a comprehensive assessment of inherited inequality. We apply this approach to household income distributions in China, India, South Africa and the USA, to illustrate how the method performs in different settings. We find that inherited inequality accounts for large shares of total inequality, from 36% in the USA to 59% in China, 62% in India, and 81% in South Africa.