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Lower and Upper Bound Estimates of Inequality of Opportunity for Emerging Economies

Author

Listed:
  • Hufe, Paul

    (University of Bristol)

  • Peichl, Andreas

    (Ludwig-Maximilians-Universität München)

  • Weishaar, Daniel

    (LMU Munich)

Abstract

Equality of opportunity is an important normative ideal of distributive justice. In spite of its wide acceptance and economic relevance, standard estimation approaches suffer from data limitations that can lead to both downward and upward biased estimates of inequality of opportunity. These shortcomings may be particularly pronounced for emerging economies in which comprehensive household survey data of sufficient sample size is often unavailable. In this paper, we assess the extent of upward and downward bias in inequality of opportunity estimates for a set of twelve emerging economies. Our findings suggest strongly downward biased estimates of inequality of opportunity in these countries. To the contrary, there is little scope for upward bias. By bounding inequality of opportunity from above, we address recent critiques that worry about the prevalence of downward biased estimates and the ensuing possibility to downplay the normative significance of inequality.

Suggested Citation

  • Hufe, Paul & Peichl, Andreas & Weishaar, Daniel, 2021. "Lower and Upper Bound Estimates of Inequality of Opportunity for Emerging Economies," IZA Discussion Papers 14680, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp14680
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    More about this item

    Keywords

    equality of opportunity; inequality; emerging economies;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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