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Economic growth and equality of opportunity

  • 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
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2011-232
Contact details of provider: Web page: http://www.ecineq.org
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  1. Aaberge, Rolf & Mogstad, Magne & Peragine, Vito, 2011. "Measuring long-term inequality of opportunity," Journal of Public Economics, Elsevier, vol. 95(3-4), pages 193-204, April.
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  4. 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.
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  12. Stephen P. Jenkins & Philippe VanKerm, 2003. "Trends in Income Inequality, Pro-Poor Income Growth and Income Mobility," Discussion Papers of DIW Berlin 377, DIW Berlin, German Institute for Economic Research.
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  14. Flaviana Palmisano, 2011. "Mobility and Long term Equality of Opportunity," SERIES 0035, Dipartimento di Scienze economiche e metodi matematici - Università di Bari, revised Feb 2011.
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  20. Daniele Checchi & Vito Peragine, 2010. "Inequality of opportunity in Italy," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 429-450, December.
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  23. Brunori, Paolo & Ferreira, Francisco H. G. & Peragine, Vito, 2013. "Inequality of opportunity, income inequality and economic mobility : some international comparisons," Policy Research Working Paper Series 6304, The World Bank.
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  25. Vito Peragine & Laura Serlenga, 2007. "Higher education and equality of opportunity in Italy," CHILD Working Papers wp01_08, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
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  31. Theo S Eicher & Cecilia Garcia Penalosa, . "Inequality and Growth," Discussion Papers in Economics at the University of Washington 0083, Department of Economics at the University of Washington.
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