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Measuring Circumstances: Francs or Ranks, Does it Matter?

Author

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  • Arnaud Lefranc

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

  • Nicolas Pistolesi

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Alain Trannoy

    (EHESS - École des hautes études en sciences sociales)

Abstract

We analyze equality of opportunity for earnings acquisition in France between 1973 and 1993. Individual circumstances are defined by parental earnings, which can be measured by either father's earnings level or father's rank in the earnings distribution. First, using stochastic dominance tools, we find that inequality of opportunity has remained stable when conditioning on the earnings level of the father, while it has diminished when conditioning on his rank in the earnings distribution. Then, we decompose the evolution of inequality of opportunity using the mean logarithmic deviation and the results of regressions of descendants'earnings on their parents earnings. The former result is explained by the stable intergenerational earnings elasticity. The latter by the decreasing wage inequality in the previous generation.

Suggested Citation

  • Arnaud Lefranc & Nicolas Pistolesi & Alain Trannoy, 2010. "Measuring Circumstances: Francs or Ranks, Does it Matter?," Post-Print hal-04157860, HAL.
    • Handle: RePEc:hal:journl:hal-04157860
    DOI: 10.1108/S1049-2585(2011)0000019009
    Note: View the original document on HAL open archive server: https://hal.science/hal-04157860
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    References listed on IDEAS

    as
    1. Miles Corak & Andrew Heisz, 1999. "The Intergenerational Earnings and Income Mobility of Canadian Men: Evidence from Longitudinal Income Tax Data," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 504-533.
    2. Marc Fleurbaey & François Maniquet, 2006. "Compensation and responsibility," Working Papers halshs-00121367, HAL.
    3. 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.
    4. 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.
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