IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-01650720.html
   My bibliography  Save this paper

Inequality Of Opportunities Vs. Inequality Of Outcomes: Are Western Societies All Alike?

Author

Listed:
  • Arnaud Lefranc

    (THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique)

  • Nicolas Pistolesi
  • Alain Trannoy

    (EHESS - École des hautes études en sciences sociales)

Abstract

This paper analyzes the relationship between income inequality and inequality of opportunities for income acquisition in nine developed countries during the 1990s. Equality of opportunity is defined as the situation where income distributions conditional on social origin cannot be ranked according to stochastic dominance criteria. We measure social origin by parental education and occupation and use the database built by Roemer et al. (2003). Stochastic dominance is assessed using nonparametric statistical tests. Our results indicate strong disparities in the degree of equality of opportunity across countries and a strong correlation between inequality of outcomes and inequality of opportunity. The U.S. and Italy show up as the most unequal countries in terms of both outcome and opportunity. At the opposite extreme, income distributions conditional on social origin are almost the same in Scan-dinavian countries even before any redistributive policy. We complement the ordinal comparison by resorting to an original scalar " Gini " index of opportunities, which can be decomposed into a risk and a return component. In our sample, inequality of opportunity is mostly driven by differences in mean income conditional on social origin, and differences in risk compensate the return element in most countries.

Suggested Citation

  • Arnaud Lefranc & Nicolas Pistolesi & Alain Trannoy, 2008. "Inequality Of Opportunities Vs. Inequality Of Outcomes: Are Western Societies All Alike?," Post-Print hal-01650720, HAL.
  • Handle: RePEc:hal:journl:hal-01650720
    DOI: 10.1111/j.1475-4991.2008.00289.x
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01650720
    as

    Download full text from publisher

    File URL: https://hal.archives-ouvertes.fr/hal-01650720/document
    Download Restriction: no

    File URL: https://libkey.io/10.1111/j.1475-4991.2008.00289.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Arnaud Lefranc & Nicolas Pistolesi & Alain Trannoy, 2006. "Equality of opportunity: Definitions and testable conditions, with an application to income in France," Working Papers 53, ECINEQ, Society for the Study of Economic Inequality.
    2. John Hassler & José Rodríguez Mora & Joseph Zeira, 2007. "Inequality and mobility," Journal of Economic Growth, Springer, vol. 12(3), pages 235-259, September.
    3. repec:dau:papers:123456789/1552 is not listed on IDEAS
    4. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," World Bank Economic Review, World Bank Group, vol. 10(3), pages 565-591, September.
    5. Checchi, Daniele & Ichino, Andrea & Rustichini, Aldo, 1999. "More equal but less mobile?: Education financing and intergenerational mobility in Italy and in the US," Journal of Public Economics, Elsevier, vol. 74(3), pages 351-393, December.
    6. Roemer, John E. & Aaberge, Rolf & Colombino, Ugo & Fritzell, Johan & Jenkins, Stephen P. & Lefranc, Arnaud & Marx, Ive & Page, Marianne & Pommer, Evert & Ruiz-Castillo, Javier, 2003. "To what extent do fiscal regimes equalize opportunities for income acquisition among citizens?," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 539-565, March.
    7. François Bourguignon & Francisco H. G. Ferreira & Marta Menéndez, 2007. "Inequality Of Opportunity In Brazil," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(4), pages 585-618, December.
    8. Andrzej Grodner & Timothy Smeeding, 2000. "Changing Income Inequality in OECD Countries: Updated Results from the Luxembourg Income Study (LIS)," LIS Working papers 252, LIS Cross-National Data Center in Luxembourg.
    9. Vitorocco Peragine, 1999. "The Distribution and Redistribution of Opportunity," Journal of Economic Surveys, Wiley Blackwell, vol. 13(1), pages 37-70, February.
    10. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
    11. Sen, Amartya, 1997. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198292975.
    12. Grawe, Nathan D., 2006. "Lifecycle bias in estimates of intergenerational earnings persistence," Labour Economics, Elsevier, vol. 13(5), pages 551-570, October.
    13. Russell Davidson & Jean-Yves Duclos, 2000. "Statistical Inference for Stochastic Dominance and for the Measurement of Poverty and Inequality," Econometrica, Econometric Society, vol. 68(6), pages 1435-1464, November.
    14. Erwin Ooghe & Erik Schokkaert & Dirk gaer, 2007. "Equality of Opportunity versus Equality of Opportunity Sets," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 28(2), pages 209-230, February.
    15. Van de Gaer, Dirk & Schokkaert, Erik & Martinez, Michel, 2001. "Three Meanings of Intergenerational Mobility," Economica, London School of Economics and Political Science, vol. 68(272), pages 519-537, November.
    16. Corak,Miles (ed.), 2004. "Generational Income Mobility in North America and Europe," Cambridge Books, Cambridge University Press, number 9780521827607, May.
    17. Hild, Matthias & Voorhoeve, Alex, 2004. "Equality Of Opportunity And Opportunity Dominance," Economics and Philosophy, Cambridge University Press, vol. 20(1), pages 117-145, April.
    18. Shorrocks, Anthony F, 1983. "Ranking Income Distributions," Economica, London School of Economics and Political Science, vol. 50(197), pages 3-17, February.
    19. Roemer, John E. & Aaberge, Rolf & Colombino, Ugo & Fritzell, Johan & Jenkins, Stephen P. & Lefranc, Arnaud & Marx, Ive & Page, Marianne & Pommer, Evert & Ruiz-Castillo, Javier, 2003. "To what extent do fiscal regimes equalize opportunities for income acquisition among citizens?," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 539-565, March.
    20. Prasanta K. PATTANAIK & Yongsheng XU, 1990. "On Ranking Opportunity Sets in Terms of Freedom of Choice," Discussion Papers (REL - Recherches Economiques de Louvain) 1990036, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    21. Peragine, Vitorocco, 1999. "The Distribution and Redistribution of Opportunity," Journal of Economic Surveys, Wiley Blackwell, vol. 13(1), pages 37-69, February.
    22. Kodde, David A & Palm, Franz C, 1986. "Wald Criteria for Jointly Testing Equality and Inequality Restriction s," Econometrica, Econometric Society, vol. 54(5), pages 1243-1248, September.
    23. Donal O’Neill & Olive Sweetman & Dirk Van de gaer, 2007. "The effects of measurement error and omitted variables when using transition matrices to measure intergenerational mobility," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(2), pages 159-178, August.
    24. Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
    25. Dirk Van De Gaer & Erik Schokkaert & Michel Martinez, 2001. "Three Meanings of Intergenerational Mobility," Economica, London School of Economics and Political Science, vol. 68(272), pages 519-538, November.
    26. Charles M. Beach & Russell Davidson, 1983. "Distribution-Free Statistical Inference with Lorenz Curves and Income Shares," Review of Economic Studies, Oxford University Press, vol. 50(4), pages 723-735.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arnaud Lefranc & Nicolas Pistolesi & Alain Trannoy, 2008. "Inequality Of Opportunities Vs. Inequality Of Outcomes: Are Western Societies All Alike?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(4), pages 513-546, December.
    2. 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.
    3. Marrero, Gustavo A. & Rodríguez, Juan G., 2013. "Inequality of opportunity and growth," Journal of Development Economics, Elsevier, vol. 104(C), pages 107-122.
    4. Arnaud Lefranc & Nicolas Pistolesi & Alain Trannoy, 2006. "Equality of opportunity: Definitions and testable conditions, with an application to income in France," Working Papers 53, ECINEQ, Society for the Study of Economic Inequality.
    5. Gamboa, Luis Fernando & Waltenberg, Fábio D., 2012. "Inequality of opportunity for educational achievement in Latin America: Evidence from PISA 2006–2009," Economics of Education Review, Elsevier, vol. 31(5), pages 694-708.
    6. Stephen P. Jenkins & John Micklewright, 2007. "New Directions in the Analysis of Inequality and Poverty," Discussion Papers of DIW Berlin 700, DIW Berlin, German Institute for Economic Research.
    7. ANDREOLI Francesco & HAVNES Tarjei & LEFRANC Arnaud, 2014. "Equalization of opportunity: Definitions, implementable conditions and application to early-childhood policy evaluation," LISER Working Paper Series 2014-12, Luxembourg Institute of Socio-Economic Research (LISER).
    8. Markus Jäntti & Stephen P. Jenkins, 2013. "Income Mobility," SOEPpapers on Multidisciplinary Panel Data Research 607, DIW Berlin, The German Socio-Economic Panel (SOEP).
    9. Luis Fernando Gamboa & Fábio D. Waltenberg, 2011. "Inequality of opportunity in educational achievement in Latin America: Evidence from PISA 2006-2009," Working Papers 206, ECINEQ, Society for the Study of Economic Inequality.
    10. Peragine, Vito & Serlenga, Laura, 2007. "Higher Education and Equality of Opportunity in Italy," IZA Discussion Papers 3163, Institute of Labor Economics (IZA).
    11. Francesco Andreoli & Tarjei Havnes & Arnaud Lefranc, 2019. "Robust Inequality of Opportunity Comparisons: Theory and Application to Early Childhood Policy Evaluation," The Review of Economics and Statistics, MIT Press, vol. 101(2), pages 355-369, May.
    12. Gustavo A. Marrero & Juan Gabriel Rodríguez, 2010. "Inequality of opportunity in Europe: Economic and policy facts," Working Papers 172, ECINEQ, Society for the Study of Economic Inequality.
    13. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.
    14. Cuesta, Jose, 2014. "Social Spending, Distribution, and Equality of Opportunities: The Opportunity Incidence Analysis," World Development, Elsevier, vol. 62(C), pages 106-124.
    15. Francisco H. G. Ferreira & Jérémie Gignoux, 2011. "The Measurement Of Inequality Of Opportunity: Theory And An Application To Latin America," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57(4), pages 622-657, December.
    16. Francesco Andreoli & Arnaud Lefranc, 2013. "Equalization of opportunity: Definitions and implementable conditions," Working Papers 310, ECINEQ, Society for the Study of Economic Inequality.
    17. Judith Niehues & Andreas Peichl, 2014. "Upper bounds of inequality of opportunity: theory and evidence for Germany and the US," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(1), pages 73-99, June.
    18. Ferreira, Francisco H. G. & Peragine, Vito, 2015. "Equality of Opportunity: Theory and Evidence," IZA Discussion Papers 8994, Institute of Labor Economics (IZA).
    19. Koen Caminada & Kees Goudswaard & Chen Wang & Jinxian Wang, 2019. "Income Inequality and Fiscal Redistribution in 31 Countries After the Crisis," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(1), pages 119-148, March.
    20. Marc Fleurbaey & Vito Peragine, 2013. "Ex Ante Versus Ex Post Equality of Opportunity," Economica, London School of Economics and Political Science, vol. 80(317), pages 118-130, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-01650720. 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: . General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.