Trends in Inequality of Opportunity for Developing Countries: Does the Economic Indicator Matter?

Abstract: This is a review of bootstrap methods, concentrating on basic ideas and applications rather than theoretical considerations. It begins with an exposition of the bootstrap estimate of standard error for one-sample situations. Several examples, some involving quite complicated statistical procedures, are given. The bootstrap is then extended to other measures of statistical accuracy such as bias and prediction error, and to complicated data structures such as time series, censored data, and regression models. Several more examples are presented illustrating these ideas. The last third of the paper deals mainly with bootstrap confidence intervals.

Abstract: Two decades after its original publication, The Analysis of Household Surveys is reissued with a new preface by its author, Sir Angus Deaton, recipient of the 2015 Nobel Prize in Economic Sciences. This classic work remains relevant to anyone with a serious interest in using household survey data to shed light on policy issues. This book reviews the analysis of household survey data, including the construction of household surveys, the econometric tools useful for such analysis, and a range of problems in development policy for which this survey analysis can be applied. The author's approach remains close to the data, using transparent econometric and graphical techniques to present data in a way that can clearly inform policy and academic debates. Chapter 1 describes the features of survey design that need to be understood in order to undertake appropriate analysis. Chapter 2 discusses the general econometric and statistical issues that arise when using survey data for estimation and inference. Chapter 3 covers the use of survey data to measure welfare, poverty, and distribution. Chapter 4 focuses on the use of household budget data to explore patterns of household demand. Chapter 5 discusses price reform, its effects on equity and efficiency, and how to measure them. Chapter 6 addresses the role of household consumption and saving in economic development. The book includes an appendix providing code and programs using STATA, which can serve as a template for the users' own analysis.

Abstract: The modern formulation of equality of opportunity emerges from discussions in political philosophy from the second half of the twentieth century beginning with Rawls (1971) and Dworkin, 1981a , Dworkin, 1981b . Equality of opportunity exists when policies compensate individuals with disadvantageous circumstances so that outcomes experienced by a population depend only on factors for which persons can be considered to be responsible. Importantly, inequality of opportunity for income exists when individuals’ incomes are in some important part determined by the educational achievement and income of the families that raised them. We review the philosophical debates referred to, commenting upon them from an economist's viewpoint. We propose several ways of modeling equality (or inequality) of opportunity, pointing out that an equal-opportunity ethic implies a non-welfarist way of ranking social outcomes. We propose that economic development should be conceived of as the equalization of opportunities for income in a country. We consider equalization of opportunity from a dynamic viewpoint, and we review popular attitudes with regard to distributive justice, showing that there is substantial popular support for an equal-opportunity ethic. We discuss the empirical issues that emerge in measuring inequality of opportunity and provide a review of the empirical literature that measures degrees of inequality of opportunity for the achievement of various objectives, in various countries.

Abstract: This forthcoming chapter in the Handbook of Income Distribution (eds., A. Atkinson and F. Bourguignon) summarizes the literature on equality of opportunity. We begin by reviewing the philosophical debate concerning equality since Rawls (sections 1 and 2), present economic algorithms for computing policies which equalize opportunities, or, more generally, ways of ordering social policies with respect to their efficacy in opportunity equalization (sections 3, 4 and 5), apply the approach to the conceptualization of economic development (section 6), discuss dynamic issues (section 7), give a preamble to a discussion of empirical work (section 8), provide evidence of population views from surveys and experiments concerning conceptions of equality (section 9), and a discuss measurement issues, summarizing the empirical literature on inequality of opportunity to date (section 10). We conclude with mention of some critiques of the equal-opportunity approach, and some predictions (section 11).

Abstract: 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 percent of the Theil index, depending on cohort and allowing for the possibility of biased coefficient estimates due to unobserved correlates. On average, 60 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.