Abstract
This paper proposes an ex-post measure of inequality of opportunity in France and its regions by assessing the inequality between individuals exerting the same effort. To this end, we define a fair income that fulfils ex-post equality of opportunity requirements. Unfairness is measured by an unfair Gini based on the distance between the actual income and the fair income. Our findings reveal that the measures of ex-post inequality of opportunity largely vary across regions, and that this is due to differences in reward schemes and in the impact of the non responsibility factors of income. We find that most regions have actual incomes closer to fair incomes than to average income, excepted Ile de France where the actual income looks poorly related to effort variables. Finally, we find that income inequality and inequality of opportunity are positively correlated among regions.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
Obviously, this residual includes effort as well as circumstance variables and it is impossible to disentangle between both determinants. Like other papers that use earnings equations, we include the residual into the circumstance set (Almas et al. 2011; Bourguignon et al. 2007). We think this is also more appropriate in the context of our study because we study to which extent individuals who exert the same effort obtain the same outcome with a direct measure of effort.
Bjorklund et al.’s decomposition is based on the following formulas:
$$\begin {array}{rll} Var\left (\epsilon _{i}|X^{C}\right ) &=& \sigma _{c}^{2} \\ \epsilon _{i} &=& \epsilon _{i}-\epsilon _{i}/\sigma _{c}+\epsilon _{i}/\sigma _{c} \\ \epsilon _{i} &=& \tilde {\epsilon }^{c}_{i} + u_{i}\\ u_{i} &=& \epsilon _{i}/\sigma _{c} \\ log(y_{i}) &=& f\left (X^{E}_{i}, X^{C}_{i}\right )+ \tilde {\epsilon }^{c}_{i} + u_{i}\end {array}$$We find no significant effects in our data.
All the categorical variables are binary in this research paper, since we transformed the multicategorial ones into dummy variables.
The generalized proportionality allocation has been characterized as a compromise solution in the first best by Bossert (1995).
The properties of the index are available in the paper by Almas et al. (2011). It is worth noting that while the Gini index satisfies full symmetry, the unfair Gini satisfies partial symmetry.
This constraint could bias our result if job mobility is correlated with effort but the sign of the correlation is not clear. On the one hand, individuals, the youngest in particular often progress by changing jobs. On the other hand, those who exert less effort are more likely to change jobs in order to benefit from unemployment benefits and are more likely to lose their job. Therefore, to the extent that the sign of the bias is not clearly identifiable, we maintain this choice.
The regression estimated to purge the effort variables from their correlation with circumstances is made on a national, instead of regional, basis due to data limitations.
Results are not reported but available upon request.
Changing the sector of reference does not change the empirical results.
References
Almas I, Cappelen AW, Lind JT, Sorensen EO, Tungodden B (2011) Measuring unfair in equality. J Public Econ 95(7–8):488–499
Arneson RJ (1989) Equality of opportunity for welfare. Philos Stud 56:77–93
Baccaini B (2007) Inter-regional migration flows in france over the last fifty years, population. INED 62(1):139–155
Bjorklund A, Jantti M, Roemer JE (2012) Equality of opportunity and the distribution of long-run income in Sweden. Soc Choice Welf 39(2):675–696
Bossert W (1995) Redistribution mechanisms based on individual characteristics. Math Soc Sci 29:1–17
Bourguignon F, Ferreira GH, Menendez M (2007) Inequality of opportunity in Brazil. Rev Income Wealth 53(4):585–618
Checchi D, Peragine V, Serlenga L (2010) Fair and unfair income inequalities in Europe. Institute for the study of labor (IZA), WP 5025
Cogneau D, Mesple-Somps S (2008) Inequality of opportunity for income in five countries of Africa. DIAL, WP 04
Cohen GA (1989) On the currency of egalitarian justice. Ethics 99:906–944
Combes P-P, Lafourcade M, Thisse J-F, Toutain J-C (2011) The rise and fall of spatial inequalities in France: a long-run perspective. Explor Econ Hist 19(2):243–271
Decoster A, Haan P (2010) Empirical welfare analysis in random utility models of labour supply. Institute for the study of labor (IZA) WP 5301
Devaux M, Jusot F, Tubeuf S, Trannoy A (2010) Inequality of opportunities in health in France: a first pass. Health Econ 19(8):921–938
Devooght K (2005) To each the same and to each his own. a proposal to measure responsibility-sensitive income inequality. Economica 75(298):280–295
Ferreira GH, Gignoux J (2008) The measurement of inequality of opportunity : theory and an application to Latin America. The World Bank, Policy Research WP 4659
Forsé M, Parodi M (2011) La perception des Inégalités en France depuis dix ans. Revue de l’OFCE, 118
Godechot O (2011) Finance and the rise in inequalities in France. Paris School of Economics, WP 13
Jusot F, Tubeuf S, Trannoy A (2010) Effort or circumstances: does the correlation matter for inequality of opportunity in health, IRDES, WP 33
Lefranc A, Trannoy A (2005) Intergenerational earnings mobility in France: is France more mobile than the U.S.? Annales d’Economie et de Statistique ENSAE 78:57–77
Lefranc A, Pistolesi N, Trannoy A (2008) Inequality of opportunities versus inequality of outcomes: are western societies all alike? Rev Income Wealth 54(4):513–546
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 93:1189–1207
Martin P (2005) The geography of inequalities in Europe. Swed Econ Policy Rev 12:83–108
Niaz A, Yalonetzky G (2012) Inequality of educational opportunity in India: changes over time and across states. World Dev 40(6):1151–1163
Oaxaca R (1973) Male-Female wage differentials in urban labor markets. Int Econ Rev 14(3):693–709
Roemer JE (1998) Equality of opportunity. Harvard University Press, Harvard
Roemer JE (2003) To what extent do fiscal regimes equalize opportunities for income acquisition among citizens? J Public Econ 87:539–565
Author information
Authors and Affiliations
Corresponding author
Additional information
The authors thank the participants of the FUSL CEREC seminar in Brussels and UAB workshop in Barcelona (project ECO2010-21668-C03-02, financed by the Ministry of Economy and Competitiveness), as well as Professors Xavier Ramos, Francisco Ferreira, Juan Gabriel Rodriguez and especially Dirk Van de Gaer for their helpful comments and suggestions. The usual disclaimers apply.
Rights and permissions
About this article
Cite this article
Carpantier, JF., Sapata, C. An Ex-Post View of Inequality of Opportunity in France and its Regions. J Labor Res 34, 281–311 (2013). https://doi.org/10.1007/s12122-013-9161-5
Published:
Issue Date:
DOI: https://doi.org/10.1007/s12122-013-9161-5