Economic Theory and Practical Lessons for Measuring Equality of Opportunities

The development of a dashboard of statistics for the monitoring of equality of opportunity should recognize important lessons from economic theory: first, descriptive statistics associated with intergenerational mobility do not speak directly to equality of opportunity without accepting a value judgment that children should not be held responsible for circumstances beyond their control and, second, the process of child development encourages a focus on different skills and competencies, as well as different stages in a child’s life. On the basis of these lessons, the paper offers three practical recommendations for the development of policy relevant indicators. First, use data appropriate for the country at hand to estimate summary measures of inter-generational mobility, including the intergenerational elasticity of earnings between parents and children, and associated transition matrices. Second, develop measures of absolute mobility, and in particular develop a poverty line based upon the minimal level of resources needed to reasonably lower the risk of intergenerational transmission of low status, and that could complement more traditional poverty lines. Finally, make full use of the information on 15 year-olds from the Programme for International Student Assessment (PISA), and expand its scope to include younger children by developing a PISA type instrument for four to five year old children across the OECD countries.