Accounting for the Spouse When Measuring Inequality of Opportunity

31 Pages Posted: 3 Jun 2015

See all articles by Andreas Peichl

Andreas Peichl

ZEW – Leibniz Centre for European Economic Research; University of Mannheim - School of Economics (VWL); IZA Institute of Labor Economics; University of Essex - Institute for Social and Economic Research (ISER)

Martin Ungerer

ZEW – Leibniz Centre for European Economic Research

Date Written: May 27, 2015

Abstract

Existing literature on inequality of opportunity (IOp) has failed to address the question as to how the circumstances and choices of spouses in a couple should be treated. By omitting information relevant to the spouse in IOp estimations, the implicit assumption was full responsibility for the partner's income, effort and circumstance variables. In this paper, we discuss whether or not the partner's characteristics should be treated as responsibility factors. Using German micro data, we analyze empirically, how IOp estimates are affected when a partner's circumstance or effort variables are included as own circumstances in the analysis. Our analysis indicates that including spouse's variables can increase IOp measures by more than 20 (35) percent for gross (net) earnings. The less the responsibility assumed for the partner's variables, the higher the IOp estimate.

Keywords: Equality of Opportunity; Earnings Inequality; Couple; Family Background; Assortative Mating

JEL Classification: D63, H2, J62, J7

Suggested Citation

Peichl, Andreas and Ungerer, Martin, Accounting for the Spouse When Measuring Inequality of Opportunity (May 27, 2015). ZEW - Centre for European Economic Research Discussion Paper No. 15-034, Available at SSRN: https://ssrn.com/abstract=2613460 or http://dx.doi.org/10.2139/ssrn.2613460

Andreas Peichl (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

University of Mannheim - School of Economics (VWL) ( email )

Mannheim 68131
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

University of Essex - Institute for Social and Economic Research (ISER)

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Martin Ungerer

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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