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Vito Peragine - One of the best experts on this subject based on the ideXlab platform.

  • Intertemporal Inequality of Opportunity
    Series, 2020
    Co-Authors: Domenico Moramarco, Flaviana Palmisano, Vito Peragine
    Abstract:

    We propose an axiomatic approach to characterize normative criteria for the evaluation of lifetime income distributions according to the Opportunity egalitarian perspective (Roemer, 1998). In a setting in which both individual incomes and predetermined circumstances are variable over time, we adopt a norm-based approach to the measurement of Inequality, and propose two different benchmark distributions, referring respectively to the ex ante and the ex post versions of equality of Opportunity. We first aggregate over time, thereby characterizing measures of interetemporal individual Inequality of Opportunity, and then aggregate the individual measures into a societal measure. Our individual measure results to be a weighted average of individuals’ Opportunity gap experienced in each period. Our aggregate measure is an average of a concave transformation of the individual intertemporal Opportunity gap and can be interpreted as an intertemporal Inequality of Opportunity index. We apply our framework to evaluate the Korean distribution of income from an intertemporal and Opportunity egalitarian perspective.

  • Upward and downward bias when measuring Inequality of Opportunity
    Social Choice and Welfare, 2019
    Co-Authors: Paolo Brunori, Vito Peragine, Laura Serlenga
    Abstract:

    Estimates of the level of Inequality of Opportunity have traditionally been proposed as lower bounds due to the downward bias resulting from the partial observability of circumstances that affect individual outcome. We show that such estimates may also suffer from upward bias as a consequence of sampling variance. The magnitude of the latter distortion depends on both the empirical strategy used and the observed sample. We suggest that, although neglected in empirical contributions, the upward bias may be significant and challenge the interpretation of Inequality of Opportunity estimates as lower bounds. We propose a simple criterion to select the best specification that balances the two sources of bias. Our method is based on cross-validation and can easily be implemented with survey data. To show how this method can improve the reliability of Inequality of Opportunity measurement, we provide an empirical illustration based on income data from 31 European countries. Our evidence shows that estimates of Inequality of Opportunity are sensitive to model selection. Alternative specifications lead to significant differences in the absolute level of Inequality of Opportunity and to the re-ranking of a number of countries, which confirms the need for an objective criterion to select the best econometric model when measuring Inequality of Opportunity.

  • Long-term evolution of Inequality of Opportunity
    Policy Research Working Papers, 2019
    Co-Authors: Maurizio Bussolo, Daniele Checchi, Vito Peragine
    Abstract:

    The main goal of this paper is to document and analyze the long-term evolution of Inequality of Opportunity and thus extend the recent empirical literature, which is mainly concerned with its measurement at a specific point in time. Using repeated cross-section surveys for five European countries (France, Germany, Great Britain, Italy, and Switzerland), the evolution of Inequality of Opportunity is measured for a period of about two decades for the whole populations, as well as for different birth cohorts. Relative Inequality of Opportunity represents an important portion of total income Inequality, with values ranging from 30 to 50 percent according to the standard deviation of logs (and reaching a lower share in case of mean log deviation) and, for all the countries, it shows a stable or declining time trend. When the birth cohorts are followed across time, Inequality of Opportunity decreases with age: the effect of circumstances seems to weaken over the life cycle. This is a quite different age profile from that of Inequality of outcomes (income or consumption), which generally increases with age. A decomposition of the relative Inequality of Opportunity allows highlighting some key drivers of its time evolution. In all the countries, there has been a clear enhancement of equality of educational Opportunity (as captured by a downward trending intergenerational education persistence) and a reduction of the returns to education. However, for some countries, notably Italy, these trends have failed to translate into decreasing Inequality of Opportunity in the income distribution because of the increasing role of parental networking (an additional channel through which parental background affects the incomes of offspring).

  • Inequality of Opportunity in tertiary education in Europe
    2019
    Co-Authors: Flaviana Palmisano, Vito Peragine, Federico Biagi
    Abstract:

    This report provides comparable estimates of Inequality of Opportunity for tertiary education for about 30 countries in Europe, exploiting the two EU-SILC waves for which information on family background is available (2005 and 2011). It exploits the two point-in-time observations available for most of the countries to analyze the relationship between many institutional dimensions and Inequality of Opportunity in tertiary education. Although Inequality of Opportunity in tertiary education varies a lot across countries, parental education and occupation seem to be the most relevant circumstances for almost all of them. We also find evidence of positive correlation between Inequality of Opportunity for tertiary education and different features of the educational system.

  • Inequality of Opportunity in sub saharan africa
    Applied Economics, 2016
    Co-Authors: Paolo Brunori, Flaviana Palmisano, Vito Peragine
    Abstract:

    In the last decades, Inequality of Opportunity has been extensively studied by economists on the assumption that, in addition to being normatively undesirable, it can be related to low potential for growth. This paper evaluates Inequality of Opportunity and the different sources of unequal opportunities in 11 Sub-Saharan Africa countries. The results indicate that the portion of total Inequality that can be attributed to exogenous circumstances -- that is, circumstances outside the control of individuals control -- is between 30 percent and 40 percent in the countries considered. The results also indicate a positive association between total consumption Inequality and Inequality of Opportunity. Finally, this paper addresses a number of methodological issues that typically arise when measuring Inequality of Opportunity with imperfect data, which is the typical case in developing countries.

Nicolas Pistolesi - One of the best experts on this subject based on the ideXlab platform.

  • Inequality of Opportunity in the land of opportunities 1968 2001
    Journal of Economic Inequality, 2009
    Co-Authors: Nicolas Pistolesi
    Abstract:

    We measure Inequality of Opportunity for earnings acquisition in the U.S. between 1968 and 2001. Following recent theories of social justice, earnings determinants are divided into two parts: Circumstances, which are characteristics outside individual control and effort representing factors impacting earnings but under individuals’ responsibility. Equality of Opportunity requires that Inequality of circumstances must be corrected while differences of effort must remain unaltered. Circumstances are represented by parental education and occupation, ethnic origin, place of birth and age. Effort is modeled with schooling choices and labour supply decisions. Using the PSID from 1968 to 2001, we provide two alternative assessments of Inequality of Opportunity using counterfactual distributions. The statistical framework is semi-parametric and builds on duration models. Finally, we conclude that Inequality of Opportunity represents between 20 and 43% of earnings Inequality, but decreases all over the period reaching around 18% in 2001.

  • Inequality of Opportunity in the land of opportunities, 1968–2001
    The Journal of Economic Inequality, 2008
    Co-Authors: Nicolas Pistolesi
    Abstract:

    We measure Inequality of Opportunity for earnings acquisition in the U.S. between 1968 and 2001. Following recent theories of social justice, earnings determinants are divided into two parts: Circumstances, which are characteristics outside individual control and effort representing factors impacting earnings but under individuals’ responsibility. Equality of Opportunity requires that Inequality of circumstances must be corrected while differences of effort must remain unaltered. Circumstances are represented by parental education and occupation, ethnic origin, place of birth and age. Effort is modeled with schooling choices and labour supply decisions. Using the PSID from 1968 to 2001, we provide two alternative assessments of Inequality of Opportunity using counterfactual distributions. The statistical framework is semi-parametric and builds on duration models. Finally, we conclude that Inequality of Opportunity represents between 20 and 43% of earnings Inequality, but decreases all over the period reaching around 18% in 2001.

  • Inequality of Opportunity in the land of opportunities, 1985-2001
    2007
    Co-Authors: Nicolas Pistolesi
    Abstract:

    We measure Inequality of Opportunity for earnings acquisition in the U.S. between 1985 and 2001. Following recent theories of social justice, we divide earnings determinants into two parts: Circumstances, which are characteristics outside individual control and e ort representing factors impacting earnings but under individuals' responsibility. Equality of Opportunity requires that Inequality of circumstances must be corrected while di erences of e ort should not be modi ed. We represent circumstances by parental earnings, parental education and occupation, ethnic origin and place of birth. E ort is modeled with schooling choices and labor supply decisions. Using the PSID from 1968 to 2001, we simulate earnings distributions with identical circumstances and unchanged e ort. The statistical framework is semi-parametric and comes from duration models. Finally, we conclude that Inequality of Opportunity has slightly changed and represents around 20-25% of total earnings Inequality. JEL Codes: D31, D63

Paolo Brunori - One of the best experts on this subject based on the ideXlab platform.

  • The Evolution of Inequality of Opportunity in Germany: A Machine Learning Approach
    Series, 2020
    Co-Authors: Paolo Brunori, Guido Neidhoefer
    Abstract:

    We show that measures of Inequality of Opportunity fully consistent with Roemer (1998)’s Inequality of Opportunity theory can be straightforwardly estimated adopting a machine learning approach. Following Roemer, Inequality of Opportunity is generally defined as Inequality between individuals exerting the same degree of effort but characterized by different exogenous circumstances. Due to difficulties of measuring effort, most empirical contributions so far identified groups of individuals sharing same circumstances, and then measured Inequality of Opportunity as between-group Inequality, without considering the e↵ort exerted. Our approach uses regression trees to identify groups of individuals characterized by identical circumstances, and a polynomial approximation to estimate the degree of effort exerted. To apply our method, we take advantage of information contained in 25 waves of the German Socio-Economic Panel. We show that in Germany Inequality of Opportunity declined immediately after the reunification, surged in the first decade of the century, and slightly declined again after 2010. The level of estimated unequal Opportunity is today just above the level recorded in 1992.

  • Upward and downward bias when measuring Inequality of Opportunity
    Social Choice and Welfare, 2019
    Co-Authors: Paolo Brunori, Vito Peragine, Laura Serlenga
    Abstract:

    Estimates of the level of Inequality of Opportunity have traditionally been proposed as lower bounds due to the downward bias resulting from the partial observability of circumstances that affect individual outcome. We show that such estimates may also suffer from upward bias as a consequence of sampling variance. The magnitude of the latter distortion depends on both the empirical strategy used and the observed sample. We suggest that, although neglected in empirical contributions, the upward bias may be significant and challenge the interpretation of Inequality of Opportunity estimates as lower bounds. We propose a simple criterion to select the best specification that balances the two sources of bias. Our method is based on cross-validation and can easily be implemented with survey data. To show how this method can improve the reliability of Inequality of Opportunity measurement, we provide an empirical illustration based on income data from 31 European countries. Our evidence shows that estimates of Inequality of Opportunity are sensitive to model selection. Alternative specifications lead to significant differences in the absolute level of Inequality of Opportunity and to the re-ranking of a number of countries, which confirms the need for an objective criterion to select the best econometric model when measuring Inequality of Opportunity.

  • The roots of Inequality : estimating Inequality of Opportunity from regression trees
    Policy Research Working Papers, 2018
    Co-Authors: Paolo Brunori, Paul Hufe, Daniel Gerszon Mahler
    Abstract:

    This paper proposes a set of new methods to estimate Inequality of Opportunity based on conditional inference regression trees. It illustrates how these methods represent a substantial improvement over existing empirical approaches to measure Inequality of Opportunity. First, the new methods minimize the risk of arbitrary and ad hoc model selection. Second, they provide a standardized way to trade off upward and downward biases in Inequality of Opportunity estimations. Finally, regression trees can be graphically represented; their structure is immediate to read and easy to understand. This will make the measurement of Inequality of Opportunity more easily comprehensible to a large audience. These advantages are illustrated by an empirical application based on the 2011 wave of the European Union Statistics on Income and Living Conditions.

  • The Perception of Inequality of Opportunity in Europe
    Review of Income and Wealth, 2016
    Co-Authors: Paolo Brunori
    Abstract:

    Does the way scholars measure Inequality of Opportunity correspond to how people perceive it? What other factors influence individual perception of this phenomenon? To answer these questions we must first clarify how scholars define and measure Inequality of Opportunity. We discuss the possible mechanisms linking objective measures to subjective perception of the phenomenon, then propose a measure of perceived Inequality of Opportunity, and finally test our hypothesis by merging data coming from two sources: the European Union Statistics on Income and Living Conditions (2011) and the International Social Survey Programme (2009). We suggest that the prevailing perception of the degree of unequal Opportunity in a large sample of respondents is only weakly correlated with its objective measure. We estimate a multilevel model considering both individual and country level controls to explain individual perception of unequal Opportunity. Our estimates suggest that the two most adopted measures of Inequality of Opportunity have not clear role in explaining its perception. Conversely, other country level variables and personal experiences of intergenerational social mobility are important determinants of how Inequality of Opportunity is perceived.

  • Inequality of Opportunity in sub saharan africa
    Applied Economics, 2016
    Co-Authors: Paolo Brunori, Flaviana Palmisano, Vito Peragine
    Abstract:

    In the last decades, Inequality of Opportunity has been extensively studied by economists on the assumption that, in addition to being normatively undesirable, it can be related to low potential for growth. This paper evaluates Inequality of Opportunity and the different sources of unequal opportunities in 11 Sub-Saharan Africa countries. The results indicate that the portion of total Inequality that can be attributed to exogenous circumstances -- that is, circumstances outside the control of individuals control -- is between 30 percent and 40 percent in the countries considered. The results also indicate a positive association between total consumption Inequality and Inequality of Opportunity. Finally, this paper addresses a number of methodological issues that typically arise when measuring Inequality of Opportunity with imperfect data, which is the typical case in developing countries.

Xavier Ramos - One of the best experts on this subject based on the ideXlab platform.

  • Measurement of Inequality of Opportunity based on counterfactuals
    Social Choice and Welfare, 2020
    Co-Authors: Dirk Van De Gaer, Xavier Ramos
    Abstract:

    The theoretical literature on Inequality of Opportunity formulates basic properties that measures of Inequality of Opportunity should have. Standard methods for the measurement of Inequality of Opportunity determine the Inequality in counterfactual outcome distributions that are constructed by statistical methods. We show that, when standard parametric procedures are used to construct the counterfactuals, the choice of Inequality measurement method and the statistical specification interact to determine whether the resulting measure of Inequality of Opportunity satisfies the basic properties.

  • Measurement of Inequality of Opportunity Based on Counterfactuals
    Social Choice and Welfare, 2020
    Co-Authors: Dirk Van De Gaer, Xavier Ramos
    Abstract:

    The theoretical literature on Inequality of Opportunity formulates basic properties that measures of Inequality of Opportunity should have. Standard methods for the measurement of Inequality of Opportunity require the construction of counterfactual outcome distributions through statistical methods. We show that, when standard parametric procedures are used to construct the counterfactuals, the specification used determines whether the resulting measures of Inequality of Opportunity satisfy the basic properties.

  • is Inequality of Opportunity robust to the measurement approach
    Review of Income and Wealth, 2020
    Co-Authors: Xavier Ramos, Dirk Van De Gaer
    Abstract:

    Recent literature has suggested many ways of measuring equality of Opportunity. We analyze in a systematic manner the various approaches put forth in the literature to show whether and to what extent different choices matter empirically. We use EU-SILC data for most European countries for 2005 and 2011. The choice between ex-ante and ex-post approaches is crucial and has a substantial influence on Inequality of Opportunity country orderings. Growth regressions also illustrate the relevance of conceptual choices. We only find significant negative effects for some direct parametric ex-ante measures.

  • is Inequality of Opportunity robust to the measurement approach
    ISSN: 0034-6586, 2020
    Co-Authors: Xavier Ramos, Dirk Van De Gaer
    Abstract:

    Recent literature has suggested many ways of measuring equality of Opportunity. We analyze in a systematic manner the various approaches put forth in the literature to show whether and to what extent different choices matter empirically. Drawing on data for most European countries for 2005 and 2011, we find that the choice between ex-ante and ex-post approaches is crucial and has a substantial influence on Inequality of Opportunity country orderings. Growth regressions also illustrate the potential relevance of conceptual choices.

  • APPROACHES TO Inequality of Opportunity: PRINCIPLES, MEASURES AND EVIDENCE
    Journal of Economic Surveys, 2015
    Co-Authors: Xavier Ramos, Dirk Van De Gaer
    Abstract:

    We put together the different conceptual issues involved in measuring Inequality of Opportunity, discuss how these concepts have been translated into computable measures, and point out the problems and choices researchers face when implementing these measures. Our analysis identifies and suggests several new possibilities to measure Inequality of Opportunity. The relevance of the conceptual issues and modelling choices are illustrated with findings from the empirical literature on income Inequality of Opportunity.

J. Ignacio García-pérez - One of the best experts on this subject based on the ideXlab platform.

  • On the welfare loss caused by Inequality of Opportunity
    The Journal of Economic Inequality, 2013
    Co-Authors: Aitor Calo-blanco, J. Ignacio García-pérez
    Abstract:

    Based on the ethical principle of equality of Opportunity, this paper presents a measure of the welfare loss that is caused by an unfair distribution of a particular outcome (income, health, education, etc). The key idea is that a fair society should produce outcomes that depend on individuals’ effort and not on their external circumstances such as gender, socioeconomic background, etc. We propose measuring Inequality of Opportunity as the welfare loss attributed to the outcome differences among individuals who exert a similar level of effort. Our results are in line with those aspects of fairness literature that give priority to the ex post compensation approach to equality of Opportunity. Finally, we present an empirical application for the measurement of the welfare loss in the income distribution in Europe. We have observed a high degree of heterogeneity among European countries. The welfare loss due to Inequality of Opportunity ranges in those, from basically zero to almost one fifth of their potential welfare. Copyright Springer Science+Business Media New York 2014