An ex-post view of inequality of opportunity in France and its regions

This paper proposes an ex-post measure of inequality of opportunity in France and its regions by assessing the inequality between individuals exerting the same effort. To this end, we define a fair income that fulfils ex-post equality of opportunity requirements. Unfairness is measured by an unfair Gini based on the distance between the actual income and the fair income. Our findings reveal that the measures of ex-post inequality of opportunity largely vary across regions, and that this is due to di_erences in reward schemes and in the impact of the non responsibility factors of income. We find that most regions have actual incomes closer to fair incomes than to average income, excepted Ile de France where the actual income looks poorly related to effort variables. Finally, we find that income inequality and inequality of opportunity are positively correlated among regions

Empirical welfare analysis : when preferences matter

Fleurbaey and Maniquet have proposed the criteria of conditional equality and of egalitarian equivalence to assess the equity among individuals in an ordinal setting. Empirical applications are rare and only partially consistent with their framework. We propose a new empirical approach that relies on individual preferences, is consistent with the ordinal criteria and enables to compare them with the cardinal criteria. We estimate a utility function that incorporates individual heterogeneous preferences, obtain ordinal measures of well-being and apply conditional equality and egalitarian equivalence. We then propose two cardinal measures of well-being, that are comparable with the ordinal model, to compute Roemer's and Van de gaer's criteria. Finally we compare the characteristics of the worst-off displayed by each criterion. We apply this model to a sample of US micro data and obtain that about 18% of the worst-off are not common to all criteria

Desigualdad de rentas y desigualdad de oportunidad en España

Este trabajo proporciona una medición empírica de la desigualdad de renta del trabajo atribuible a la desigualdad de oportunidad entre la población ocupada de España. Esta medición se basa en estimar una ecuación de rentas del trabajo por mínimos cuadrados ordinarios y por variables instrumentales con el fin de controlar por el posible sesgo de endogeneidad de la variable de educación. Los resultados permiten seleccionar el método de los mínimos cuadrados ordinarios para estimar las ecuaciones de rentas del trabajo para cinco cohortes de edad. Así, se mide la magnitud de la desigualdad de oportunidad en España, sus principales determinantes y su evolución a lo largo del ciclo de vida. Asimismo se emplean índices de desigualdad para calcular la reducción de la desigualdad de renta del trabajo que se obtendría si se cumpliera la igualdad de oportunidad, y para evaluar cuales son las circunstancias que más impactarían en esta reducción

An ex-post view of inequality of opportunity in France and its regions

This paper proposes an ex-post measure of inequality of opportunity in France and its regions by assessing the inequality between individuals exerting the same effort. To this end, we define a fair income that fulfils ex-post equality of opportunity requirements. Unfairness is measured by an unfair Gini based on the distance between the actual income and the fair income. Our findings reveal that the measures of ex-post inequality of opportunity largely vary across regions, and that this is due to di_erences in reward schemes and in the impact of the non responsibility factors of income. We find that most regions have actual incomes closer to fair incomes than to average income, excepted Ile de France where the actual income looks poorly related to effort variables. Finally, we find that income inequality and inequality of opportunity are positively correlated among regions

Desigualdad de rentas y desigualdad de oportunidad en España

Este trabajo proporciona una medición empírica de la desigualdad de renta del trabajo atribuible a la desigualdad de oportunidad entre la población ocupada de España. Esta medición se basa en estimar una ecuación de rentas del trabajo por mínimos cuadrados ordinarios y por variables instrumentales con el fin de controlar por el posible sesgo de endogeneidad de la variable de educación. Los resultados permiten seleccionar el método de los mínimos cuadrados ordinarios para estimar las ecuaciones de rentas del trabajo para cinco cohortes de edad. Así, se mide la magnitud de la desigualdad de oportunidad en España, sus principales determinantes y su evolución a lo largo del ciclo de vida. Asimismo se emplean índices de desigualdad para calcular la reducción de la desigualdad de renta del trabajo que se obtendría si se cumpliera la igualdad de oportunidad, y para evaluar cuales son las circunstancias que más impactarían en esta reducción

Essays on Equality of Opportunity

La teoría de la igualdad de oportunidad permite justificar algunas desigualdades: las desigualdades generadas por factores por el cual el individuo es responsable (llamados esfuerzo) son justas y no dan lugar a redistribución. Al contrario, las desigualdades que son causadas por factores ajenos a la responsabilidad individual (llamados circunstancias) son injustas y por tanto deben ser corregidas. A pesar de que conste un consenso sobre la frontera entre desigualdades justas e injustas, distintas estrategias de medición existen que pueden conllevar a diferencias en las conclusiones. En esta tesis, estudiamos tres técnicas de medición de la desigualdad de oportunidad con el fin de evaluar el impacto de las técnicas usadas sobre las conclusiones en término de desigualdad de oportunidad. En el primer capitulo, investigamos hasta que punto la magnitud de la desigualdad de oportunidad varia cuando (1) incluimos una o varias variables de circunstancia, (2) tomamos o no en cuenta el efecto indirecto de las circunstancias, (3) cambiamos la frontera entre esfuerzo y circunstancia. Medimos la magnitud de la desigualdad de oportunidad en la adquisición de ingresos laborales en España y encontramos que ésta es sensible a la inclusión de varias circunstancias. En efecto, no solo la educación de los padres es une circunstancia relevante, pero otros factores generan desigualdad de oportunidad tal como el país de nacimiento ó el genero. El efecto indirecto es también importante dado que explica cerca de la mitad de la desigualdad de oportunidad total. Finalmente, cambiar la frontera entre circunstancias y esfuerzo no es de gran impacto en nuestro caso porque los factores, que son sin ambigüedad fuera de la responsabilidad individual, son los que mas impactan sobre la desigualdad de ingresos. El segundo capitulo analiza tos cuestiones: Es el esfuerzo premiado de la misma manera en todas las regiones de Francia? Son las regiones igualmente jerarquizadas en término de desigualdad de oportunidad y de desigualdad de ingresos? Para contestar a ello, primero estimamos una ecuación de ingresos en función de variables de esfuerzo y de circunstancias. Después, calculamos un ingreso justo que sólo depende de las variables de esfuerzo y obtenemos una medida de desigualdad de oportunidad basada en la distancia entre el ingreso observado y el ingreso justo. Encontramos desigualdades de oportunidad en todas las regiones de Francia y amplias diferencias en los premios al esfuerzo entre las regiones. Por otro lado, la jerarquía de las regiones en término de desigualdad de ingreso y de desigualdad de oportunidad es muy similar, lo cual es conforme a otros estudios que investigan la correlación entre desigualdad de ingreso y desigualdad de oportunidad. En el tercer capitulo, asumimos que los individuos tienen preferencias heterogéneas sobre el consumo y el ocio. En este caso, los criterios de igualdad de oportunidad deben ser adaptados lo cual ha sido formulado por Fleurbaey y Maniquet. Proponemos un método que permita aplicar estos criterios ordinales, y que sea aplicable a otros criterios. Con este fin, usamos un modelo econométrico que llega a identificar preferencias de grupo, y añadimos información sobre las decisiones de los individuos en término de consumo y ocio, para aproximar las preferencias individuales. También, proponemos dos métodos para comparar los criterios ordinales propuestos por Fleurbaey y Maniquet con los criterios cardinales propuestos por Roemer y Van de gaer. Encontramos muy poco apareamiento entre los criterios y concluimos que las diferencias en los resultados dados por cada criterio muestran que las estrategias de medición son tan importantes como los criterios usados.The theory of equality of opportunity leads to legitimate some inequalities: inequalities due to factors for which the individual can be held responsible are fair. On the contrary, when inequalities are due to factors that are beyond individual's responsibility, these inequalities are unfair and should be removed. Even though a consensus emerges about the cut between fair and unfair inequalities, distinct measurement strategies have emerged and may lead to distinct conclusions. In this thesis, we study three aspects concerning the measurement of equality of opportunity to assess the impact of the techniques used on the conclusions about unfair inequalities. To measure inequality of opportunity, we can (1) measure the impact of one or several non-responsibility factors on individuals' outcomes, (2) account or not for the indirect impact of non-responsibility factors on responsibility factors and (3) move the cut that separates both types of factors. The first chapter investigates to which extent the magnitude of inequality of opportunity is sensitive to the change in one of these three decisions. We perform the analysis for Spain and find that the magnitude of ex-ante inequality of opportunity is sensitive to the inclusion of several non-responsibility factors. Family background is found to explain inequalities in income, but other non-responsibility variables such as country of birth are also found to be important determinants of inequalities. The indirect effect of non-responsibility factors is found to be of main importance as it explains around half the overall inequality of opportunity. Finally, the cut between responsibility and non-responsibility factors is not found to be of main impact as the variables that are obviously beyond individuals' responsibility are the ones that impact the most on inequality. The second chapter addresses two questions: Is effort equally rewarded across regions of France and is ex-post inequality of opportunity distributed in the same way as income? To this end, we estimate a wage equation as a function of circumstance and effort variables. We calculate the fair income which is the income that depends on effort only and we take the distance between the actual earnings and the fair income to obtain a measure of ex-post inequality of opportunity. We exhibit the presence of inequality of opportunity in all the regions of France and the way responsibility factors are rewarded differ across regions. On the other hand, the rankings of the regions in terms of equality of opportunity and inequality in income change slightly, which is consistent with other studies on the correlation between income inequality and inequality of opportunity. In the third chapter, we assume individuals have heterogeneous preferences on consumption and leisure. In this case, the criteria of equality of opportunity have to be adapted as proposed by Fleurbaey and Maniquet. Our aim is to propose a model to apply these criteria and make them comparable with cardinal criteria. To this end, we start from a model that identifies groups' preferences and we make use of information on individuals' choices to approximate individuals' preferences. We also propose two ways of cardinalizing our measure such as to compare our results with two cardinal criteria. We show very little matching among the criteria. The target of redistribution policy changes as we move from the egalitarian equivalence criterion to the conditional equality criterion. Then, we find strong similarities between Van de gaer's criterion and the conditional equality criterion. Roemer's criterion appears to give very distinct conclusions with respect to the other three criteria. To conclude, the difference in the results given by each criterion shows that the strategies of measurement are at least as important as the criterion used

The Ups and Downs of European Real Estate Markets’ Integration

National real estate markets are usually considered to be segmented from each other. The benefits of international diversification in real estate markets have been shown to be greater than those in equity or bond markets. New developments in Europe (the single market, monetary union and post-crisis coordination of macroprudential policies) are expected to increase integration and reduce these benefits. We study the time-varying degree of integration of European real estate markets over the period 1971-2017 by estimating the explanatory power of a multi-factor linear model. We find that the integration has been relatively stable over time, with a temporary rise during the 2008 financial crisis. We also note that the integration dynamics within Europe have not become stronger than with non-European countries. The data do not detect stable regional clusters of integration. The international diversification of real estate investments still matters

An ex-post view of inequality of opportunity in France and its regions

This paper proposes an ex-post measure of inequality of opportunity in France and its regions by assessing the inequality between individuals exerting the same effort. To this end, we define a fair income that fulfils ex-post equality of opportunity requirements. Unfairness is measured by an unfair Gini based on the distance between the actual income and the fair income. Our findings reveal that the measures of ex-post inequality of opportunity largely vary across regions, and that this is due to diₑrences in reward schemes and in the impact of the non responsibility factors of income. We find that most regions have actual incomes closer to fair incomes than to average income, excepted Ile de France where the actual income looks poorly related to effort variables. Finally, we find that income inequality and inequality of opportunity are positively correlated among regions

Empirical welfare analysis: when preferences matter

International audienceAbstract The conditional equality and egalitarian equivalence criteria were proposed by Fleurbaey (Fairness, responsibility, and welfare, Oxford University Press, Oxford, 2008) to provide better foundations to interpersonal comparisons in the context of heterogeneous preferences and multidimensional welfare. The first implementations of the egalitarian equivalence criterion follow an approach where the preferences are captured at the group level (based on socio-demographic variables) rather than at the individual level. Our contribution is to extend these models by using information on individual preferences, derived from the potential discrepancy between the group level optimal choice and the revealed choice of the individuals. We implement and compare the conditional equality and egalitarian equivalence criteria on a 2004 US microeconomic dataset and find that these criteria are relatively consistent in the identification of the worst-off. We also show that up to 18 % of the worst-off are no longer categorized as worst-off when the empirical approach accounts for individual preferences