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Economic growth and equality of opportunity

Listed author(s):
  • Vito Peragine

    ()

    (Department of Economics and Mathematics, University of Bari)

  • Flaviana Palmisano

    (Department of Economics and Mathematics, University of Bari)

  • Paolo Brunori

    (Department of Economics and Mathematics, University of Bari)

In this paper we argue that a better understanding of the relationship between inequality and growth can be obtained by shifting the analysis from the space of final achievements to the space of opportunities. To this end, we introduce the Opportunity Growth Incidence Curve (OGIC) that can be used to evaluate the income dynamics of specific groups of the population and to infer the role of growth in the evolution of inequality of opportunity over time. By employing a rank dependent social welfare function we provide a rigorous normative justification for the use of the OGIC: We obtain suitable dominance conditions and we show how they can be interpreted in terms of OGIC dominance. We also propose an index that can be used to measure the impact of growth in terms of opportunity redistribution. Finally, we provide two empirical illustrations, for Italy and for Brazil, which show the potentials of the tools we have introduced.

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File URL: http://www.ecineq.org/milano/WP/ECINEQ2011-232.pdf
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Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 232.

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Length: 39 pages
Date of creation: 2011
Handle: RePEc:inq:inqwps:ecineq2011-232
Contact details of provider: Web page: http://www.ecineq.org
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