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Inequality of opportunity in Brazil

Author

Listed:
  • François Bourguignon

    () (Banque Mondiale - Banque Mondiale)

  • Francisco H. G. Ferreira

    (Banque Mondiale - Banque Mondiale)

  • Marta Menéndez

    (UP9 - Université Paris 9, Dauphine - Université Paris-Dauphine, LEA - Laboratoire d'Economie Appliquée - INRA - Institut National de la Recherche Agronomique, PSE - Paris School of Economics)

Abstract

This paper proposes a measure of the contribution of unequal opportunities to earnings inequality. Drawing on the distinction between "circumstance" and "effort" variables in John Roemer's work on equality of opportunity, we associate inequality of opportunities with five observed circumstances which lie beyond the control of the individual--father's and mother's education; father's occupation; race; and region of birth. The paper provides a range of estimates of the importance of these opportunity-forming circumstances in accounting for earnings inequality in one of the world's most unequal countries. We also decompose the effect of opportunities into a direct effect on earnings and an indirect component, which works through the "effort" variables. The decomposition is applied to the distribution of male earnings in urban Brazil, in 1996. The five observed circumstances are found to account for between 10 and 37 percent of the Theil index, depending on cohort and allowing for the possibility of biased coefficient estimates due to unobserved correlates. On average, 60 percent of this impact operates through the direct effect on earnings. Parental education is the most important circumstance affecting earnings, but the occupation of the father and race also play a role.

Suggested Citation

  • François Bourguignon & Francisco H. G. Ferreira & Marta Menéndez, 2007. "Inequality of opportunity in Brazil," Post-Print halshs-00754189, HAL.
  • Handle: RePEc:hal:journl:halshs-00754189 DOI: 10.1111/j.1475-4991.2007.00247.x Note: View the original document on HAL open archive server: https://hal-pjse.archives-ouvertes.fr/halshs-00754189
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    References listed on IDEAS

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    1. Ferreira, Francisco H. G. & Lanjouw, Peter & Neri, Marcelo Côrtes, 2003. "A Robust Poverty Profile for Brazil Using Multiple Data Sources," Revista Brasileira de Economia - RBE, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 57(1), January.
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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