Abstract

This paper compares estimates of inequality of opportunity for different groups of the Chilean population for the years 2006 and 2013, using the parametric and non-parametric methodology developed by Bourguignon, Ferreira and Menéndez (2003), and Checchi and Peragine (2010). These are based on John Roemer’s work. Roemer (1993, 1998) classified the determining factors of an individual's socioeconomic outcomes (income, status, etc.) as “circumstances” and “effort”. Circumstances are exogenous aspects such as gender, race, family background, or place of birth, which may affect a person’s outcomes. Effort, on the contrary, depends on individual choice. Equality of opportunity proposes that inequality due to circumstances is compensated by public policy, and inequality due to effort is not. For the non-parametric estimation, two observed circumstances are strongly associated with inequality of opportunity: parental education and the region of birth. For the parametric approach health status when the person was born, ethnicity, and whether the person grew up with both parents until the age of 15, are used as circumstances. The paper finds that the share of inequality of opportunity over total income inequality has increased for women and men between 2006 and 2013. Results are sensitive to the inequality index chosen. Estimates using the GINI index are twice as high as those obtained with the MLD index.