Accounting for the spouse when measuring inequality of opportunity

Peichl, Andreas ; Ungerer, Martin

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URN: urn:nbn:de:bsz:180-madoc-393962
Document Type: Working paper
Year of publication: 2015
The title of a journal, publication series: ZEW Discussion Papers
Volume: 15-034
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: D63 , H2 , J62 , J7,
Keywords (English): Equality of opportunity , earnings inequality , couple , family background , assortative mating
Abstract: Existing literature on inequality of opportunity (IOp) has failed to address the question as to how the circumstances and choices of spouses in a couple should be treated. By omitting information relevant to the spouse in IOp estimations, the implicit assumption was full responsibility for the partner's income, effort and circumstance variables. In this paper, we discuss whether or not the partner's characteristics should be treated as responsibility factors. Using German micro data, we analyze empirically, how IOp estimates are affected when a partner's circumstance or effort variables are included as own circumstances in the analysis. Our analysis indicates that including spouse's variables can increase IOp measures by more than 20 (35) percent for gross (net) earnings. The less the responsibility assumed for the partner's variables, the higher the IOp estimate.

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