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Equality of Opportunity and the Distribution of Long-Run Income in Sweden

Author

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  • Björklund, Anders

    () (SOFI, Stockholm University)

  • Jäntti, Markus

    () (SOFI, Stockholm University)

  • Roemer, John E.

    () (Yale University)

Abstract

Equality of opportunity is an ethical goal with almost universal appeal. The interpretation taken here is that a society has achieved equality of opportunity if it is the case that what individuals accomplish, with respect to some desirable objective, is determined wholly by their choices and personal effort, rather than by circumstances beyond their control. We use data for Swedish men born between 1955 and 1967 for whom we measure the distribution of long-run income, as well as several important background circumstances, such as parental education and income, family structure and own IQ before adulthood. We address the question: in Sweden, given its present constellation of social policies and institutions, to what extent is existing income inequality due to circumstances, as opposed to 'effort'? Our results suggest that several circumstances, importantly both parental income and own IQ, are important for long-run income inequality, but that variations in individual effort account for the most part of that inequality.

Suggested Citation

  • Björklund, Anders & Jäntti, Markus & Roemer, John E., 2011. "Equality of Opportunity and the Distribution of Long-Run Income in Sweden," IZA Discussion Papers 5466, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5466
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    References listed on IDEAS

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    1. Jaime Saavedra-Chanduví & José R. Molinas & Ricardo Paes de Barros & Francisco H. G. Ferreira, 2009. "Measuring Inequality of Opportunities in Latin America and the Caribbean," IDB Publications (Books), Inter-American Development Bank, number 361, April.
    2. Anders Bohlmark & Matthew J. Lindquist, 2006. "Life-Cycle Variations in the Association between Current and Lifetime Income: Replication and Extension for Sweden," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 879-900, October.
    3. 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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    5. Miles Corak & Patrizio Piraino, 2011. "The Intergenerational Transmission of Employers," Journal of Labor Economics, University of Chicago Press, vol. 29(1), pages 37-68, January.
    6. François Bourguignon & Francisco H. G. Ferreira & Marta Menéndez, 2007. "Inequality Of Opportunity In Brazil," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(4), pages 585-618, December.
    7. Fleurbaey, Marc, 2012. "Fairness, Responsibility, and Welfare," OUP Catalogue, Oxford University Press, number 9780199653591.
    8. Lefranc, Arnaud & Pistolesi, Nicolas & Trannoy, Alain, 2009. "Equality of opportunity and luck: Definitions and testable conditions, with an application to income in France," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1189-1207, December.
    9. Donal O'Neill & Olive Sweetman & Dirk van de gaer, 1999. "Equality of Opportunity and Kernel Density Estimation: An Application to Intergenerational Mobility," Economics, Finance and Accounting Department Working Paper Series n950999, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    10. Keane, Michael P. & Roemer, John E., 2009. "Assessing policies to equalize opportunity using an equilibrium model of educational and occupational choices," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 879-898, August.
    11. Bernt Bratsberg & Knut Røed & Oddbjørn Raaum & Robin Naylor & Markus Ja¨ntti & Tor Eriksson & Eva O¨sterbacka, 2007. "Nonlinearities in Intergenerational Earnings Mobility: Consequences for Cross-Country Comparisons," Economic Journal, Royal Economic Society, vol. 117(519), pages 72-92, March.
    12. Björklund Anders & Jäntti Markus & Solon Gary, 2007. "Nature and Nurture in the Intergenerational Transmission of Socioeconomic Status: Evidence from Swedish Children and Their Biological and Rearing Parents," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(2), pages 1-23, November.
    13. Björklund, Anders & Roine, Jesper & Waldenström, Daniel, 2008. "Intergenerational top income mobility in Sweden – A combination of equal opportunity and capitalistic dynasties," SSE/EFI Working Paper Series in Economics and Finance 705, Stockholm School of Economics.
    14. Björklund, Anders & Jäntti, Markus & Lindquist, Matthew J., 2009. "Family background and income during the rise of the welfare state: Brother correlations in income for Swedish men born 1932-1968," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 671-680, June.
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    Cited by:

    1. Hufe, Paul & Peichl, Andreas, 2016. "Beyond equal rights: Equality of opportunity in political participation," ZEW Discussion Papers 16-068, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. Aitor Calo-Blanco & J. García-Pérez, 2014. "On the welfare loss caused by inequality of opportunity," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(2), pages 221-237, June.
    3. Xavier Ramos & Dirk Van de gaer, 2012. "Empirical approaches to inequality of opportunity: Principles, measures, and evidence," Working Papers 259, ECINEQ, Society for the Study of Economic Inequality.
    4. Antonio Abatemarco, 2015. "A Gini approach to inequality of opportunity: evidence from the PSID," Empirical Economics, Springer, vol. 49(4), pages 1497-1519, December.
    5. 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).
    6. Rajius Idzalika & Maria C. Lo Bue, 2016. "Opportunities in education: are factors outside individual responsibility really persistent? Evidence from Indonesia, 1997-2007," Working Papers 397, ECINEQ, Society for the Study of Economic Inequality.
    7. Francisco H. G. Ferreira & Vito Peragine, 2015. "Equality of opportunity: Theory and evidence," Working Papers 359, ECINEQ, Society for the Study of Economic Inequality.
    8. Andreoli, Francesco & Havnes, Tarjei & Lefranc, Arnaud, 2014. "Equalization of Opportunity: Definitions, Implementable Conditions and Application to Early-Childhood Policy Evaluation," IZA Discussion Papers 8503, Institute for the Study of Labor (IZA).
    9. Leone, Tharcisio, 2017. "The gender gap in intergenerational mobility: Evidence of educational persistence in Brazil," Discussion Papers 2017/27, Free University Berlin, School of Business & Economics.
    10. Paolo Brunori & Vito Peragine & Laura Serlenga, 2016. "Upward and downward bias when measuring inequality of opportunity," SERIES 05-2016, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Sep 2016.
    11. Bruce Bradbury & Markus Jäntti & Lena Lindahl, 2017. "Labour Income, Social Transfers and Child Poverty," LIS Working papers 707, LIS Cross-National Data Center in Luxembourg.
    12. Marc Fleurbaey & Vito Peragine & Xavier Ramos, 2017. "Ex post inequality of opportunity comparisons," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(3), pages 577-603, December.
    13. Paolo Li Donni & Juan Rodríguez & Pedro Rosa Dias, 2015. "Empirical definition of social types in the analysis of inequality of opportunity: a latent classes approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(3), pages 673-701, March.
    14. John E. Roemer & Alain Trannoy, 2016. "Equality of Opportunity: Theory and Measurement," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1288-1332, December.
    15. Hufe, Paul & Peichl, Andreas, 2015. "Lower Bounds and the Linearity Assumption in Parametric Estimations of Inequality of Opportunity," IZA Discussion Papers 9605, Institute for the Study of Labor (IZA).
    16. 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).
    17. Jean-François Carpantier & Christelle Sapata, 2013. "An Ex-Post View of Inequality of Opportunity in France and its Regions," Journal of Labor Research, Springer, vol. 34(3), pages 281-311, September.
    18. CARPANTIER, Jean-François & SAPATA, Christelle, 2012. "Unfair inequalities in France: A regional comparison," CORE Discussion Papers 2012038, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    19. Ana Suarez Alvarez & Ana Jesus Lopez Menendez, 2017. "Income inequality and inequality of opportunity in Europe. Are they on the rise?," Working Papers 436, ECINEQ, Society for the Study of Economic Inequality.
    20. Vito Peragine, 2011. "Review of “Measuring inequality of opportunities in Latin America and the Caribbean” by Ricardo Paes de Barros, Francisco H. G. Ferreira, José R. Molinas Vega, and Jaime Saavedra Chanduvi , World Bank," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(1), pages 137-143, March.
    21. repec:eee:ehbiol:v:26:y:2017:i:c:p:164-173 is not listed on IDEAS

    More about this item

    Keywords

    inequality; family background; equality of opportunity; long-run income;

    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
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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