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Title: Inequality of Opportunity and Economic Growth: New Evidence

Citation Type: Miscellaneous

Publication Year: 2023

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Abstract: This article estimates the effect of inequality of opportunity (IOp) on economic growth in European regions by providing an innovative analysis of such a nexus. Using Machine Learning to control for a high-dimensional vector of controls (i.e. human capital, institutions democracy, industrial structure, economic conditions, financial development, demographic aspects, urbanization, labour market conditions, investments, market distortions, public intervention) and mitigate potential endogeneity deriving from omitted confounders, we find a general negative effect of IOp on economic growth. This estimated negative effect persists even when controlling for total income inequality. Differently from previous empirical works, we also provide new evidence on the potential dynamic effect of IOp on economic growth by using local projections and observing our outcome variable over a four-years horizon. Interestingly, we find that the negative effect of IOp on economic growth is not persistent over time with statistically significant coefficients at the first two horizons only.

Url: http://www.siepweb.it/siep/wp/wp-content/uploads/2023/05/5.EttaChiuri2023_COLCERASA_Inequality-of-Opportunity-and-Economic-Growth.pdf

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Authors: Colcerasa, Francesco

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Data Collections: IPUMS USA

Topics: Poverty and Welfare

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