Evidence for Inequality of Opportunities. A Cohort Analysis for Chile
Author
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Contreras Guajardo, Dante
Author
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Larrañaga Jiménez, Osvaldo
Author
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Puentes Encina, Esteban
Author
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Rau Binder, Tomás
Admission date
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2017-05-24T20:18:24Z
Available date
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2017-05-24T20:18:24Z
Publication date
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2009
Cita de ítem
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Series Documentos de Trabajo, No. 298 Octubre, 2009
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Identifier
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https://repositorio.uchile.cl/handle/2250/144087
Abstract
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In this paper we estimate the impact of inequality of opportunity on inequality of income in the
Chilean economy. We focus on the distribution of individual labor income. It is found that the share of
overall inequality which is due to inequality of opportunities is relatively high in Chile, but the degree of
overall inequality is lower than in other countries in the region. It is also found that fatherís education is
the circumstance that contributes the most to inequality of income in Chile. This variable is likely to be
highly correlated with parental household income, which is a key determinant in the formation of early
human capital through its impact on nutrition, health and education. We also conduct a cohort analysis
to study the impact of opportunities on labor income inequality in three groups of workers : those that
are 25-34, 35-44 and 45-54 years old. We found that overall inequality increases with the age of the cohort
and that the absolute contribution of opportunity in income inequality also increases with the age of the
cohort. That the share of opportunity in income inequality is particularly low in the youngest cohort,
may be associated to a more even playing Öeld resulting from the introduction of opportunity equalizing
policies in the last decades. Further evidence for this latter hypothesis is provided by decomposing the
change in inequality across cohorts based on changes on circumstance endowments and returns, based
on the methodology introduced by Juhn, Murphy and Pierce (1994).
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Lenguage
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en
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Publisher
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Universidad de Chile, Facultad de Economía y Negocios