Channels of inequality of opportunity: the role of education and occupation in Europe

Abstract

Inequality of Opportunity (IO) refers to that inequality stemming from factors, called circumstances, beyond the scope of individual responsibility, such as gender, race, place of birth or socioeconomic background. In general, circumstances do not directly convert into future individual’s income. Indeed, diferent circumstances in childhood lead to diferent levels of education and diferent occupational categories which, in turn, contribute to generate divergent levels of income during adulthood. Using the Intergenerational Transmission modules in 2005 and 2011 from the EU-SILC, we estimate the importance of attained education and occupational category as mediating channels in the generation of IO in 26 European countries. We fnd that the attained level of education channels up to 30% of total IO, with important diferences across Europe. Once attained education is taken into account, occupation explains less than 5% of IO in most countries. Moreover, the importance of education as a channel for IO is negatively correlated both with the share of the population that attains tertiary levels of education and with the importance of government expenditure in education relative to GDP.