Abstract
We show that measures of inequality of opportunity (IOP) fully consistent with Roemer (1998)'s IOP theory can be straightforwardly estimated by adopting a machine learning approach, and apply our novel method to analyse the development of IOP in Germany during the last three decades. Hereby, we take advantage of information contained in 25 waves of the Socio-Economic Panel. Our analysis shows that in Germany IOP declined immediately after reunification, increased in the first decade of the century, and slightly declined again after 2010. Over the entire period, at the top of the distribution we always find individuals that resided in West-Germany before the fall of the Berlin Wall, whose fathers had a high occupational position, and whose mothers had a high educational degree. East-German residents in 1989, with low educated parents, persistently qualify at the bottom.
Highlights
The ideal of equality of opportunity has fascinated mankind for centuries
At the top of the distribution we always find individuals who resided in West Germany before the fall of the Berlin Wall, whose parents had a high occupational position, and whose mothers had a high educational degree, whereas East Germans with low educated parents persistently qualify at the lowest end
Past studies report a rise in net income inequality in Germany in the 1990s until 2005/2006 and a subsequent stagnation characterized by small ups and downs (e.g. Biewen and Juhasz, 2012; Biewen et al, 2019; Jessen, 2019; Peichl et al, 2012)
Summary
The ideal of equality of opportunity has fascinated mankind for centuries. Its popularity among people from both sides of the political spectrum probably derives from the fact that it encompasses and balances two aspects: equality of outcomes and freedom of choice. Recent contributions have proposed approaches to improve the empirical specification of the underlying models, finding consistent econometric methods to identify the relevant circumstances, and eventually estimate IOP Within this literature, Li Donni et al (2015) and Brunori et al (2018) propose data-driven approaches to identify Roemerian types (i.e., sets of individuals characterized by identical circumstances). Despite a substantial change in the structure of opportunities over time, having being located in the Eastern or Western part of Germany in 1989 is, more than two decades after reunification, constantly a significant circumstance defining the subdivision in types over the course of time
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
