Does high income inequality signify inequality of opportunities?

David Navon and Yoav Cohen

MPRA Paper from University Library of Munich, Germany

Abstract: It is often presumed that Gini coefficient values taken to reflect high income inequality are largely due to some combination of socioeconomic factors that gives rise to inequality of opportunities. We demonstrate, using computer simulations, that practically every Gini value within the entire range observed in state economies can be approximated by at least one of a set of possible models of an economy in which earning is totally due to random factors. Although that clearly does not prove that opportunities are in reality fairly equal, it does suggest that inequality of opportunities is not necessary for high income inequality. At the least, it relegates the burden of proof to whoever ascribes the latter largely to the former.

Keywords: Gini; Lorenz; income inequality; inequality of opportunities (search for similar items in EconPapers)
JEL-codes: D31 D63 I3 I32 P1 Y1 (search for similar items in EconPapers)
Date: 2013-11-12
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