Abstract
The aim of this paper is to contribute both theoretically and empirically to the analysis of Inequality of Opportunity over time, providing some significant findings referred to the Spanish case. The analysis is carried out using microdata collected by the European Union Statistics on Income and Living Conditions (EU-SILC), which incorporate a wide variety of personal harmonised variables, allowing comparability with other countries. The availability of this database for the period 2004 and 2010 is particularly relevant for assessing changes over time in the main inequality indices and the contribution of circumstances to inequality of opportunity. We find that the effect of circumstances on income distribution has significantly intensified between the two years. To test the significance of the differences between years we perform bootstrap estimations.
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Notes
The generalised entropy measures (Cowell 1980; Shorrocks 1984) are given by the expression \(GE\left( \beta \right) = \frac{1}{{\beta \left( {\beta - 1} \right)}}\left[ {\frac{1}{N}\sum\nolimits_{i = 1}^{N} {\left( {\frac{{y_{i} }}{{\bar{y}}}} \right)^{\beta } - 1} } \right]\). They conform a family of measures that satisfy the principles of mean independence, population independence, symmetry, the Pigou–Dalton transfer principle and decomposability. The β parameter represents the weight given to the distances between incomes of different parts of the distribution. When β takes low values, the measure is more sensitive to what occurs at the bottom of the distribution, whereas for high values of the parameter β the measures would be more sensitive to what occurs on the top. The measure proposed (MLD) entails β = 0.
The lack of statistical inference in the literature on measurement of income inequality has been pointed up, among others, by Athanasopoulos and Vahid (2003). These authors use bootstrap methods to analyse the significance of changes in income inequality in Australia.
The equivalence scale used by EU-SILC is: \(e = 1 + 0.5\left( {N_{{14^{ + } }} - 1} \right) + 0.3N_{{13^{ - } }}\) where \(N_{{14^{ + } }}\) is the number of household members with 14 years or more and \(N_{{13^{ - } }}\) the number of members with 13 years or less.
The CDF is not displayed for the variable Gender since no significant differences are observed between the two categories of individuals.
The choice of the variable Regions for the sensitivity analysis is not mere coincidence. We analyse the impact of this variable on the inequality of opportunity, aiming to fill the current literature gap. As it has been already mentioned in Sect. 3, we consider regional inequalities unfair; therefore, to analyse the effect the inclusion of this variable has in inequality of opportunity is a way to emphasise its relevance.
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The authors would like to thank the anonymous referees for their valuable comments which helped to improve the manuscript.
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Suárez Álvarez, A., López Menéndez, A.J. Assessing Changes Over Time in Inequality of Opportunity: The Case of Spain. Soc Indic Res 139, 989–1014 (2018). https://doi.org/10.1007/s11205-017-1759-1
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DOI: https://doi.org/10.1007/s11205-017-1759-1