A body of economic theory has now been developed to
define and measure substantive equality of opportunity,
drawing on the “liberal-egalitarian” tradition of political
theory that followed Rawls classic 1971 work, A theory
of justice (15). In this economic theory, the outcome that
each individual achieves is the result of two ingredients:
circumstances (family background, endowments,
exogenous shocks); and individual effort, or other variables
under personal responsibility (16). Inequalities due to
circumstances are unfair and should be eliminated as
much as possible, while inequalities due to unequal effort
should be considered acceptable. Measuring inequality
of circumstances is not an easy task. There is no unique
indicator, and the amount of data is quite challenging, given
that all circumstances need to be observed. Bourguignon et
al. (17), among others, proposed a strategy to decompose
income inequality due to circumstances and income
inequality due to effort based on regression methods.
A body of economic theory has now been developed todefine and measure substantive equality of opportunity,drawing on the “liberal-egalitarian” tradition of politicaltheory that followed Rawls classic 1971 work, A theoryof justice (15). In this economic theory, the outcome thateach individual achieves is the result of two ingredients:circumstances (family background, endowments,exogenous shocks); and individual effort, or other variablesunder personal responsibility (16). Inequalities due tocircumstances are unfair and should be eliminated asmuch as possible, while inequalities due to unequal effortshould be considered acceptable. Measuring inequalityof circumstances is not an easy task. There is no uniqueindicator, and the amount of data is quite challenging, giventhat all circumstances need to be observed. Bourguignon etal. (17), among others, proposed a strategy to decomposeincome inequality due to circumstances and incomeinequality due to effort based on regression methods.
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