Inequality of opportunity and growth

TLDR: In this article, the authors show that the relationship between inequality and growth depends on which component is larger, i.e., inequality of opportunity and effort, and they find a positive relationship between effort and growth.

About: This article is published in Journal of Development Economics.The article was published on 2013-09-01 and is currently open access. It has received 240 citations till now. The article focuses on the topics: Income inequality metrics & Social inequality.

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Table 2. Inequality of income and opportunity (3 groups) in 1990.

Table 1. Inequality of income and opportunity (3 groups) in 1980.

TABLE IV.1

TABLE IV.1

Frequently asked questions

Q1. What contributions have the authors mentioned in the paper "Inequality of opportunity and growth" ?

The authors postulate in this paper that one reason for this inconclusive result is that income inequality consist at least in two different sorts of inequality, inequality of opportunity and effort. 

Q2. What future works have the authors mentioned in the paper "Inequality of opportunity and growth" ?

In this respect, the European Union is carrying out the so-call surveys on living conditions since 2004 for the European countries ( 15 countries in 2004, 20 countries in 2005, 23 countries in 2006 and 25 countries in 2007 ) so hopefully the authors will be able to contrast with a better database the main conclusions of this study in the future. 

Q3. What is the main reason for this inconclusive result?

The authors have postulated in this paper that the main reason for this inconclusive result is that income inequality measures are indeed measuring at least two different sorts of inequality: inequality of opportunity and inequality of effort. 

Q4. What is the proposed policy for maximizing the minimum of type-averages of the objective?

The proposed policy maximizes the minimum of type-averages of the objective, over types: = ∑ =∈ Φ∈ Q t Tt V v Q 1 );(1minmaxarg π ϕ ϕπϕ . 

Q5. What are the two sets of growth models proposed in the literature?

The results are presented in section 5 and the paper concludes in section 6.Two sets of growth models have been proposed in the literature: 1) Models where inequality is necessary for growth. 

Q6. Why is inequality more important in poor countries?

This can be due to the fact that inequality of opportunities is more important within less developed countries, while the part of inequality explained by the inequality of effort is more important in rich countries. 

Q7. How did the authors construct proxies of inequality of opportunity indexes?

Using depurated data of the PSID database for 24 US states from 1980 to 2000, the authors have followed Van de Gaer (1993) to construct proxies of inequality of opportunity indexes.