Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/192602
Authors: 
Aaberge, Rolf
Mogstad, Magne
Peragine, Vito
Year of Publication: 
2010
Series/Report no.: 
Discussion Papers No. 620
Abstract: 
In this paper, we introduce and apply a general framework for evaluating long-term income distributions according to the Equality of Opportunity principle (EOp). Our framework allows for both an ex-ante and an ex-post approach to EOp. Our ex-post approach relies on a permanent income measure defined as the minimum annual expenditure an individual would need in order to be as well off as he could be by undertaking inter-period income transfers. There is long-term ex-post inequality of opportunity if individuals who exert the same effort have different permanent incomes. In comparison, the ex-ante approach focuses on the expected permanent income for individuals with identical circumstances. Hence, the ex-ante approach pays attention to inequalities in expected permanent income between different types of individuals. To demonstrate the empirical relevance of a long-run perspective on EOp, we exploit a unique panel data from Norway on individuals' incomes over their working lifespan.
Subjects: 
equality of opportunity
social welfare
inequality
permanent income
intertemporal choice
ex-ante
ex-post
JEL: 
D71
D91
I32
Document Type: 
Working Paper

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