Artikel

Inequality of outcomes vs inequality of opportunities in a developing country: An exploration analysis for Chile

We apply a variation of Bourguignon, Meléndez and Ferreira (2005) methodology to examine the extent to which income inequality is associated with the inequality of observed exogenous circumstances of origin that determine individuals' opportunities to pursue their chosen life plans. We find that equalizing a set of observed circumstances of origin across individuals such as parents' schooling, parents' stability of employment, father's age, household size and growing in a single vs a bi-parental household reduces income inequality, but in a small margin, in the range of 8 to 13 points of the Gini coefficient, about a 15-20 per cent drop. These results are similar to those obtained by Bourguignon et al. (2005) for Brazil, although the dataset and the set of observed circumstances are partially different. These results suggest that a significant part of income inequality may be associated with unobserved heterogeneity across individuals unrelated to circumstances of origin, such as preferences, effort and sheer luck, transitory shocks and measurement errors in income. However, assessing the relative importance of these factors vs. the role of unobserved circumstances remains as future research.

Language
Englisch

Bibliographic citation
Journal: Estudios de Economía ; ISSN: 0718-5286 ; Volume: 34 ; Year: 2007 ; Issue: 2 ; Pages: 185-202 ; Santiago de Chile: Universidad de Chile, Departamento de Economía

Classification
Wirtschaft
Personal Income, Wealth, and Their Distributions
Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Subject
income inequality
equality of opportunities

Event
Geistige Schöpfung
(who)
Núñez, Javier
Tartakowsky, Andrea
Event
Veröffentlichung
(who)
Universidad de Chile, Departamento de Economía
(where)
Santiago de Chile
(when)
2007

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Artikel

Associated

  • Núñez, Javier
  • Tartakowsky, Andrea
  • Universidad de Chile, Departamento de Economía

Time of origin

  • 2007

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