Full Citation

Title: Inequality of opportunity and growth

Citation Type: Working Paper

Publication Year: 2011

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Abstract: Theoretical and empirical studies exploring the effects of income inequality upon growth reach a disappointing inconclusive result. This paper postulates that one reasonfor this ambiguity is that income inequality is actually a composite measure of inequality of opportunity and inequality of returns to effort. They affect growth throughopposite channels, so the relationship between inequality and growth depends on which component is larger. Using the PSID database for U.S. in 1970, 1980 and 1990 we find robust support for a negative relationship between inequality of opportunity and growth, and a positive relationship between inequality of returns to effort and growth.

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Authors: Rodrguez, Juan G.; Marrero, Gustavo A.

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Publication Number: DT-E-2011-05

Institution: Universidad de La Laguana: Ctedra de Economa y Finanzas Internacionales

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Publisher Location: Santa Cruz de Tenerife, Spain

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Other

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