Documento de trabajo
Inequality of Opportunities and Long Term Earnings Measures: Evidence for Chile
Fecha
2012Registro en:
Serie Documentos de Trabajo No. 352, pp. 1 - 32, Abril, 2012
Autor
Contreras Guajardo, Dante
Larrañaga Jiménez, Osvaldo
Puentes Encina, Esteban
Rau Binder, Tomás
Institución
Resumen
In this paper we assess the sensitivity of measures of inequality of
opportunity to long-term earnings data. We compare indicators using
four and seven year earnings with indicators that use the most
commonly available yearly and monthly earnings. We argue that four
and seven year earnings are preferable since they are a more precise
measure of permanent income and are less affected by short-term
variability. We use data available for Chile and found that the use of
seven and four year earnings produces a 25% higher share of
inequality of opportunity compared to yearly and monthly earnings
measures. We find that parental education contributes most to income
inequality in Chile. Finally, we perform Monte Carlo simulations,
finding that our results are robust to several income processes.