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Equality of Opportunity and Redistribution in Europe

Author

Listed:
  • Dunnzlaff, Lina

    () (IZA)

  • Neumann, Dirk

    () (OECD)

  • Niehues, Judith

    () (Cologne Institute for Economic Research)

  • Peichl, Andreas

    () (Ifo Institute for Economic Research)

Abstract

The concept of equality of opportunity (EOp) goes back to Roemer (1993, 1998) who argues that a society shall guarantee its members equal access to advantage regardless of their circumstances, while holding them responsible for turning that access into actual advantage by the application of effort. Such arguments have been on the political agenda across the European Union, where the recent enlargements have brought together countries with rather different economic, social, and political backgrounds. This paper investigates how family background influences income acquisition in 15 European countries. It also scrutinizes how governments affect EOp through the design of their tax and transfer schemes. Our overall results suggest that the link between family background and economic success is usually tighter in relatively poor countries than in rich countries. Moreover, we find a clear country clustering for the Scandinavian, the Continental European, and the Anglo-Saxon countries. For Eastern Europe, our results are less definite. Looking at the impact of the tax and benefit schemes in the EU, it can be concluded that both taxes and transfers reduce inequality of opportunities, with social benefits typically playing the key role. Furthermore, the equalizing impacts of the tax benefit system on inequality of opportunity differ substantially from the ones observed when referring to the traditional notion of inequality of outcomes.

Suggested Citation

  • Dunnzlaff, Lina & Neumann, Dirk & Niehues, Judith & Peichl, Andreas, 2010. "Equality of Opportunity and Redistribution in Europe," IZA Discussion Papers 5375, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5375
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    Cited by:

    1. Judith Niehues & Andreas Peichl, 2014. "Upper bounds of inequality of opportunity: theory and evidence for Germany and the US," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(1), pages 73-99, June.
    2. Niehues, Judith & Peichl, Andreas, 2011. "Lower and Upper Bounds of Unfair Inequality: Theory and Evidence for Germany and the US," IZA Discussion Papers 5834, Institute for the Study of Labor (IZA).
    3. Luis Fernando Gamboa & Erika Londoño, 2015. "Assessing Educational Unfair Inequalities at a Regional Level in Colombia," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 83, pages 97-133, Julio - D.
    4. Luis Fernando Gamboa & Erika Londoño, 2014. "Equality of educational opportunities in Colombia: A metropolitan area comparison," DOCUMENTOS DE TRABAJO 011040, UNIVERSIDAD DEL ROSARIO.
    5. L. Arrondel & M. Roger & F. Savignac, 2014. "Wealth and Income in the Euro Area: Heterogeneity in Households’ Behaviours?," Working papers 497, Banque de France.
    6. Fabio Waltenberg & Marcia De Carvalho & Luis Fernando Gamboa, 2016. "Measuring Inequality Of Opportunity In Education By Combining Information On Coverage And Achievement In Pisa," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 218, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    7. Michal Brzezinski, 2015. "Inequality of opportunity in Europe before and after the Great Recession," Working Papers 353, ECINEQ, Society for the Study of Economic Inequality.
    8. Márcia de Carvalho & Luis Fernando Gamboa & Fábio D. Waltenberg, 2012. "Equality of Educational Ppportunity Employing PISA Data: Taking both Achievement and Access into Account," Working Papers 277, ECINEQ, Society for the Study of Economic Inequality.
    9. Luongo Patrizia, 2015. "Inequality of Opportunity in Educational Achievements: Cross-country and Intertemporal Comparisons," WIDER Working Paper Series 043, World Institute for Development Economic Research (UNU-WIDER).
    10. repec:aea:aecrev:v:108:y:2018:i:2:p:521-54 is not listed on IDEAS
    11. Judith Niehues & Andreas Peichl, 2012. "Bounds of Unfair Inequality of Opportunity: Theory and Evidence for Germany and the US," CESifo Working Paper Series 3815, CESifo Group Munich.
    12. Niehues, J. (Judith) & Andreas Peichl, 2012. "GINI DP 34: Bounds of Unfair Inequality of Opportunity: Theory and Evidence for Germany and the US," GINI Discussion Papers 34, AIAS, Amsterdam Institute for Advanced Labour Studies.

    More about this item

    Keywords

    redistribution; equality of opportunity; inequality;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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