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The Measurement of Inequality of Inequality of Opportunity: Theory and an Application to Latin America

Author

Listed:
  • Francisco H.G. Ferreira

    (Banque Mondiale - Banque Mondiale, IZA - Institute for the Study of Labor - IZA)

  • Jérémie Gignoux

    (PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract
Building on the existing literature, this paper constructs a simple scalar measure of inequality of opportunity and applies it to six Latin American countries. The measure--which captures between-group inequality when groups are defined exclusively on the basis of predetermined circumstances--is shown to yield a lower-bound estimate of true inequality of opportunity. Absolute and relative versions of the index are defined, and alternative parametric and non-parametric methods are employed to generate robust estimates. In the application to Latin America, we find inequality of opportunity shares ranging from one quarter to one half of total consumption inequality. An opportunity-deprivation profile that identifies the worst-off types in each society is also formally defined, and described for the same six countries. In three of them, 100 percent of the opportunity-deprived were found to be indigenous or Afro-descendants.

Suggested Citation

  • Francisco H.G. Ferreira & Jérémie Gignoux, 2011. "The Measurement of Inequality of Inequality of Opportunity: Theory and an Application to Latin America," PSE-Ecole d'économie de Paris (Postprint) halshs-00754503, HAL.
    • Handle: RePEc:hal:pseptp:halshs-00754503
    DOI: 10.1111/j.1475-4991.2011.00467.x
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    Keywords

    Inequality of opportunity; Latin America;

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