Inequality of income acquisition : the role of childhood circumstances


Hufe, Paul ; Peichl, Andreas ; Roemer, John ; Ungerer, Martin


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URL: https://ub-madoc.bib.uni-mannheim.de/40470
URN: urn:nbn:de:bsz:180-madoc-404704
Document Type: Working paper
Year of publication: 2015
The title of a journal, publication series: ZEW Discussion Papers
Volume: 15-084
Place of publication: Mannheim
Publication language: English
Institution: Außerfakultäre Einrichtungen > Graduate School of Economic and Social Sciences - CDSB (Business Studies)
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 , D3,
Keywords (English): Equality of opportunity , earnings inequality , lower bounds , early childhood achievements
Abstract: Many studies have estimated the effect of circumstances on income acquisition. Perhaps surprisingly, the fraction of inequality attributable to circumstances is usually quite small – in the advanced democracies, on the order of 20%. One reason for this is the lack of data on circumstance variables in empirical research. Here, we argue that all behaviors and accomplishments of children should be considered the consequence of circumstances: That is, an individual should not be considered to be responsible for her choices before an age of consent is reached. Using two data sets that contain data on childhood accomplishments, other environmental circumstances, and the income as an adult, we compute that the fraction of income inequality due to circumstances in the US is over 45%, and in the UK it is over 31%.

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Hufe, Paul ; Peichl, Andreas ; Roemer, John ; Ungerer, Martin (2015) Inequality of income acquisition : the role of childhood circumstances. Open Access ZEW Discussion Papers Mannheim 15-084 [Working paper]
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