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

  • Björklund, Anders

    ()

    (SOFI, Stockholm University)

  • Jäntti, Markus

    ()

    (SOFI, Stockholm University)

  • Roemer, John E.

    ()

    (Yale University)

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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5466.

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Length: 34 pages
Date of creation: Jan 2011
Date of revision:
Handle: RePEc:iza:izadps:dp5466
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  1. Corak, Miles & Piraino, Patrizio, 2010. "The Intergenerational Transmission of Employers," IZA Discussion Papers 4819, Institute for the Study of Labor (IZA).
  2. 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.
  3. 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," IZA Discussion Papers 2665, Institute for the Study of Labor (IZA).
  4. Björklund, Anders & Roine, Jesper & Waldenström, Daniel, 2008. "Intergenerational Top Income Mobility in Sweden: A Combination of Equal Opportunity and Capitalistic Dynasties," IZA Discussion Papers 3801, Institute for the Study of Labor (IZA).
  5. 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 C72-C92, 03.
  6. 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.
  7. 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.
  8. Ricardo Paes de Barros & Francisco H.G. Ferreira & Jose R. Molinas Vega & Jaime Saavedra Chanduvi, 2009. "Measuring Inequality of Opportunities in Latin America and the Caribbean," World Bank Publications, The World Bank, number 2580, April.
  9. Fleurbaey, Marc, 2012. "Fairness, Responsibility, and Welfare," OUP Catalogue, Oxford University Press, number 9780199653591, December.
  10. 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.
  11. 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.
  12. 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.
  13. repec:dau:papers:123456789/1552 is not listed on IDEAS
  14. Daniele Checchi & Vito Peragine, 2010. "Inequality of opportunity in Italy," Journal of Economic Inequality, Springer, vol. 8(4), pages 429-450, December.
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