The relationship between Inequality of Outcomes and Inequality of Opportunities in a high-inequality country: The case of Chile
Based on the methodology developed by Bourguignon, Melendez and Ferreira (2005) we explore the extent to which income inequality in Chile is associated with inequality of observed exogenous circumstances of origin, which shape individuals “opportunities” to pursue their chosen life plans. We find that equalizing a diverse set of observed circumstances of origin across individuals such as parents’ schooling and employment, household size and composition, ethnic background and features of the municipality of origin reduces the Gini coefficient in about 7-8 percentage points. About half of this effect is transmitted directly on earnings, while the remaining part through its indirect effect on the accumulation of schooling. Further results suggest that the influence of unobserved circumstances on income distribution may be limited, and hence aspects such as preferences, effort, luck, income shocks and income measurement errors may also be important factors behind income inequality, issue that awaits further research.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Francois Bourguignon & Francisco H.B. Ferreira & Marta Menéndez, 2005.
"Inequality of Opportunity in Brazil,"
Ibero America Institute for Econ. Research (IAI) Discussion Papers
133, Ibero-America Institute for Economic Research.
- Javier Núñez E. & Leslie Miranda, 2007. "Recent Findings on Intergenerational Income and Educational Mobility in Chile," Working Papers wp244, University of Chile, Department of Economics.
- Jere R. Behrman & Mark R. Rosenzweig, 2004. "Returns to Birthweight," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 586-601, May.
- Alesina, Alberto F & Di Tella, Rafael & MacCulloch, Robert, 2001.
"Inequality and Happiness: Are Europeans and Americans Different?,"
CEPR Discussion Papers
2877, C.E.P.R. Discussion Papers.
- Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2009-2042, August.
- Di Tella, Rafael & Alesina, Alberto & MacCulloch, Robert, 2004. "Inequality and Happiness: Are Europeans and Americans Different?," Scholarly Articles 4553007, Harvard University Department of Economics.
- Alberto Alesina & Rafael Di Tella & Robert MacCulloch, 2001. "Inequality and Happiness: Are Europeans and Americans Different?," Harvard Institute of Economic Research Working Papers 1938, Harvard - Institute of Economic Research.
- Alberto Alesina & Rafael Di Tella & Robert MacCulloch, 2001. "Inequality and Happiness: Are Europeans and Americans Different?," NBER Working Papers 8198, National Bureau of Economic Research, Inc.
- Jaime Ruiz-Tagle, 2007. "Forecasting wage inequality," Estudios de Economia, University of Chile, Department of Economics, vol. 34(2 Year 20), pages 141-162, December.
- Javier Núñez & Andrea Tartakowsky, 2007. "Inequality of outcomes vs. inequality of opportunities in a developing country. An exploratory analysis for Chile," Estudios de Economia, University of Chile, Department of Economics, vol. 34(2 Year 20), pages 185-202, December.
When requesting a correction, please mention this item's handle: RePEc:udc:wpaper:wp292. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tatiana Reyes)
If references are entirely missing, you can add them using this form.