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Measuring inequality of opportunity through between-group inequality components

Abstract

Opportunity egalitarians support rich-to-poor redistribution whenever this allows for the compensation of income disparities due to non-responsible choices (circumstances). In this paper we focus on the measurement of opportunity inequality within Roemer’s (Philos Public Aff 22:146–166, 1993) pragmatic theory where a disjoint and exhaustive partition rule is assumed such that individuals within the same population can be grouped depending on the sole circumstances. Given entropy-based, deprivation-based and welfaristic inequality decomposition procedures, we show that the between-group Gini component from Dagum’s decomposition is the only well known between-group inequality index satisfying the Pigou-Dalton principle of transfer as reformulated for opportunity egalitarianism.

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Correspondence to Antonio Abatemarco.

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The present research was co-founded by the European Commission under the 6th Framework Programmes Research Infrastructures Action (Trans-national Access contract RITA 026040) hosted by IRISS-C/I at CEPS/INSTEAD, Differdange (Luxembourg).

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Abatemarco, A. Measuring inequality of opportunity through between-group inequality components. J Econ Inequal 8, 475–490 (2010). https://doi.org/10.1007/s10888-009-9121-8

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Keywords

  • Inequality
  • Opportunity
  • Decomposition