Social Choice and Welfare

, Volume 39, Issue 2–3, pp 675–696

Equality of opportunity and the distribution of long-run income in Sweden

Original Paper

Abstract

Equality of opportunity is an ethical goal with almost universal appeal. The interpretation taken here is that a society has achieved equality of opportunity if it is the case that what individuals accomplish, with respect to some desirable objective, is determined wholly by their choices and personal effort, rather than by circumstances beyond their control. We use data for Swedish men born between 1955 and 1967 for whom we measure the distribution of long-run income, as well as several important background circumstances, such as parental education and income, family structure and own IQ before adulthood. We address the question: in Sweden, given its present constellation of social policies and institutions, to what extent is existing income inequality due to circumstances, as opposed to ‘effort’? Our results suggest that several circumstances, importantly both parental income and own IQ, are important for long-run income inequality, but that variations in individual effort account for the most part of that inequality.

JEL Classification

D31 D63 J62 C14 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Arneson RJ (1989) Equality and equality of opportunity for welfare. Philos Stud 56: 77–93CrossRefGoogle Scholar
  2. Betts JR, Roemer JE (2007) Equalizing opportunity for racial and socioeconomic groups in the United States through educational finance reform. In: Woessmann L, Peterson PE (eds) Schools and the equal opportunity problem, chapter 9. MIT Press, Cambridge, MA, pp 209–238Google Scholar
  3. Bingley P., Corak M, Westergrd-Nielsen N (2010a) Families, firms, and labour market inequalities: the long run consequences of the intergenerational transmission of employers in Canada and Denmark. In: Ermisch J, Jäntti M, Smeeding T (eds) Inequality from childhood to adulthood: a cross-national perspective on the transmission of advantage. Russell Sage Foundation, New YorkGoogle Scholar
  4. Björklund A, Jäntti M, Solon G (2007) Nature and nurture in the intergenerational transmission of socioeconomic status: evidence from Swedish children and their biological and rearing parents. B.E. J Econ Anal Policy 7(2(Advances)), Article 4. http://www.bepress.com/bejeap/vol7/iss2/art4
  5. Björklund A, Jäntti M, Lindquist MJ (2009) Family background and income during the rise of the welfare state: Brother correlations in income for Swedish men born 1932–1968. J Public Econ 93(5–6): 671–680. doi:10.1016/j.jpubeco.2009.02.006 CrossRefGoogle Scholar
  6. Björklund A, Eriksson HK, Jäntti M (2010b) IQ and family background: are associations strong or weak? B.E. J Econ Anal Policy 10(1), (Contributions) Article 1. doi:10.2202/1935-1682.2349. http://www.bepress.com/bejeap/vol10/iss1/art2
  7. Björklund A, Roine J, Waldenström D (2010c) Intergenerational top income mobility in Sweden: capitalist dynasties in the land of equal opportunity? Working Paper 9/2010, Swedish Institute for Social Research, Stockholm UniversityGoogle Scholar
  8. Bourguignon F, Ferreira FH (2007) Inequality of opportunity in Brazil. Rev Income Wealth 53(4): 585–618CrossRefGoogle Scholar
  9. Böhlmark A, Lindquist MJ (2006) Life-cycle variations in the association between current and lifetime income: replication and extension for Sweden. J Labor Econ 24(4): 879–896CrossRefGoogle Scholar
  10. Bratsberg B, Røed K, Raaum O, Naylor R, Jäntti M, Eriksson T, Österbacka E (2007) Nonlinearities in intergenerational earnings mobility: consequences for cross-country comparisons. Econ J 117(519): C72–C92CrossRefGoogle Scholar
  11. Carlstedt B (2000) Cognitive abilities: Aspects of structure, process and measurement. PhD thesis, Gothenburg UniversityGoogle Scholar
  12. Cesarini D (2009) Family influences on productive skills, human capital and lifecycle income. Unpublished manuscript, Massachusetts Institute of TechnologyGoogle Scholar
  13. Checchi D, Peragine V (2010) Inequality of opportunity in Italy. J Econ Inequal 8(4): 429–450CrossRefGoogle Scholar
  14. Cohen GA (1989) On the currency of egalitarian justice. Ethics 99(4): 906–944CrossRefGoogle Scholar
  15. Corak M, Piraino P (2011) The intergenerational transmission of employers and earnings. J Labor Econ 29(1): 37–68CrossRefGoogle Scholar
  16. de Barros RP, Ferreira FHG, Vega JM, Chanduri JS (2009) Measuring inequalities of opportunities in Latin America and the Caribbean. World Bank, Washington, DCGoogle Scholar
  17. Dworkin R (1981) What is equality? Part 2: equality of resources. Philos Public Aff 10(4): 283–345Google Scholar
  18. Fleurbaey M (2008) Fairness, responsibility, and welfare. Oxford University Press, OxfordGoogle Scholar
  19. Ihaka R, Gentleman R (1996) R: a language for data analysis and graphics. J Comput Graph Stat 5(3): 299–314Google Scholar
  20. Keane MP, Roemer JE (2009) Assessing policies to equalize opportunity using an equilibrium model of educational and occupational choices. J Public Econ 93(7-8): 879–898. doi:10.1016/j.jpubeco.2009.04.002 CrossRefGoogle Scholar
  21. Lee W (2008) Empirical estimation of the share of observed income inequality due to unequal circumstance (memo to authors)Google Scholar
  22. Lefranc A, Pistolesi N, Trannoy A (2009) Equality of opportunity and luck: definitions and testable conditions, with an application to income in France. J Public Econ 93(11–12): 1189–1207CrossRefGoogle Scholar
  23. Mårdberg B, Carlstedt B (1998) Swedish enlistment battery (SEB): construct validity and latent variable estimation of cognitive abilities by the CAT-SEB. Int J Sel Assess 6(2): 107–114CrossRefGoogle Scholar
  24. Nozick R (1974) Anarchy, state, Utopia. Basic Books, New YorkGoogle Scholar
  25. O’Neill D, Sweetman O, Vande Gaer D (2000) Equality of opportunity and kernel density estimation: an application to intergenerational mobility. Adv Econom 14: 259–274Google Scholar
  26. Roemer JE (1993) A pragmatic theory of responsibility for the egalitarian planner. Philos Public Aff 22(2): 146–166Google Scholar
  27. Roemer JE (1998) Equality of opportunity. Harvard University Press, New YorkGoogle Scholar
  28. Roemer JE (2004) Equal opportunity and intergenerational mobility: going beyond intergenerational transition matrices. In: Corak M (eds) Generational income mobility in North America and Europe, Chapter 3. Cambridge University Press, Cambridge, pp 48–57CrossRefGoogle Scholar
  29. Shorrocks AF (1999) Decomposition procedures for distributional analysis: a unified framework based on the Shapley value. Unpublished manuscript. University of Essex and Institute for Fiscal StudiesGoogle Scholar
  30. Solon G (1999) Intergenerational mobility in the labor market. In: Ashenfelter O, Card D (eds) Handbook of labor economics, volume 3. Elsevier Science BV, New York, pp 1761–1800CrossRefGoogle Scholar

Copyright information

© Springer-Verlag 2011

Authors and Affiliations

  1. 1.Swedish Institute for Social Social Research (SOFI)Stockholm UniversityStockholmSweden
  2. 2.IZABonnGermany
  3. 3.Yale UniversityNew HavenUSA

Personalised recommendations