Income inequality for young people in Uruguay: an assessment based on the equality of opportunities approach.

Ferrando, Mery (2011). "Income inequality for young people in Uruguay: an assessment based on the equality of opportunities approach." Paper presented at the 8th annual conference of the HDCA, 6-8 September 2011, the Hague, the Netherlands.

This paper attempts to analyze to which extent inequalities in income and educational attainment among Uruguayan youngsters is explained by factors beyond their control, using for this task the theoretical framework of equality of opportunity. For there to be equality of opportunity it is required that the circumstances or factors outside the individuals have no influence on their achievements or benefits. Following the proposals of Ferreira and Gignoux (2008) and Checchi and Peragine (2005), scalar indices are constructed to measure inequality of opportunities in order to analyze the extent to which observed inequalities of income and years of education are due to differences in opportunities young people face. Both to parametric and nonparametric estimations are performed, in order to obtain robust results. Additionally, this paper seeks to determine which circumstances influence the most in youngster’s access to income and educational opportunities. The research was done based on to specific survey for young people between 12 and 29 held in Uruguay in 2008. The results show less than 12% of inequality in earnings is explained by the circumstances observed. The results for years of education are significantly higher, between 19% and 27% of global inequality is explained by circumstances observed. The results are robust to the estimation strategy followed. The partial effect of the circumstances demonstrates that education of the parents is by far the most important determinant of inequality in both earnings and years of education.
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