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Inequality of Opportunity in Brazil

Bourguignon, François; Ferreira, Francisco; Menéndez, Marta (2007), Inequality of Opportunity in Brazil, The Review of Income and Wealth, 53, 4, p. 585-618. http://dx.doi.org/10.1111/j.1475-4991.2007.00247.x

Type
Article accepté pour publication ou publié
External document link
http://www3.interscience.wiley.com/cgi-bin/fulltext/118503383/PDFSTART
Date
2007
Journal name
The Review of Income and Wealth
Volume
53
Number
4
Pages
585-618
Publication identifier
http://dx.doi.org/10.1111/j.1475-4991.2007.00247.x
Metadata
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Author(s)
Bourguignon, François
Ferreira, Francisco
Menéndez, Marta
Abstract (EN)
This paper proposes a measure of the contribution of unequal opportunities to earnings inequality. Drawing on the distinction between ‘circumstance’ and ‘effort’ variables in John Roemer’s work on equality of opportunity, we associate inequality of opportunities with five observed circumstances which lie beyond the control of the individual – father’s and mother’s education; father’s occupation; race; and region of birth. The paper provides a range of estimates of the importance of these opportunity-forming circumstances in accounting for earnings inequality in one of the world’s most unequal countries. We also decompose the effect of opportunities into a direct effect on earnings and an indirect component, which works through the “effort” variables. The decomposition is applied to the distribution of male earnings in urban Brazil, in 1996. The five observed circumstances are found to account for between 10% and 37% of the Theil index, depending on cohort and allowing for the possibility of biased coefficient estimates due to unobserved correlates. On average, sixty percent of this impact operates through the direct effect on earnings. Parental education is the most important circumstance affecting earnings, but the occupation of the father and race also play a role.
Subjects / Keywords
Inequality of opportunity; earnings inequality; Brazil; Measurement and Analysis of Poverty; Welfare Programs
JEL
I32 - Measurement and Analysis of Poverty
I38 - Government Policy; Provision and Effects of Welfare Programs
D31 - Personal Income, Wealth, and Their Distributions
D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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