Measurement of inequality of opportunity based on counterfactuals

Abstract

The theoretical literature on inequality of opportunity formulates basic properties that measures of inequality of opportunity should have. Standard methods for the measurement of inequality of opportunity determine the inequality in counterfactual outcome distributions that are constructed by statistical methods. We show that, when standard parametric procedures are used to construct the counterfactuals, the choice of inequality measurement method and the statistical specification interact to determine whether the resulting measure of inequality of opportunity satisfies the basic properties.