Inequality of Opportunity in Health and Cognitive Abilities: The Case of Chile

This paper studies inequality of opportunity in health in Chile. Following Roemer’s approach to equality of opportunity, we separate the effect of circumstances and efforts -healthy behaviors- on self-assessed health. In addition to parental and family background, our set of circumstances includes a proxy of numeracy skills. We find that circumstances explain nearly 40 percent of the variance of health outcomes, four times the contribution of efforts. More than one third of the contribution of circumstances is due to numeracy skills, similar to the contribution of parental education. Parents’ longevity is also important but its contribution is smaller. The overall influence of circumstances on inequality is substantial, ranging from 62 to more than 90 percent depending on the inequality index used. Overall, we find that health inequality is higher in Chile than in European countries and the contribution of unequal opportunities to inequality is at least as large. Our results also highlight the importance of cognitive ability on health inequality.