Title:
The Link between Inequality of Opportunity for Income Acquisition and Income Inequality : the French example, 1977-1993

Abstract:
We analyze equality of opportunity for earnings acquisition in France between 1973 and 1993 conditional on the father earnings in the earnings distribution using two waves of the French data set FQP. First, using stochastic dominance tools, we find that inequality of opportunity has remained stable when conditioning on the earnings level of the father, while it has diminished when conditioning on his rank in the earnings distribution. The former result is explained by the stable intergenerational earnings elasticity. The latter by the decreasing wage inequality in the previous generation. Then, we decompose the evolution of inequality of opportunity using the mean logarithmic deviation and the results of regressions of descendants’‘earnings on their parents earnings. It is shown that the main reason beneath the reduction of inequality of opportunity lies in the decrease of earnings inequality taking place in the eighties.