Addressing Inequality of Opportunity: Some Lessons from the OECD and Latin America

Abstract

Most OECD countries have seen income inequality increase over the past 25 years. The possibility that this may have been accompanied by rising inequality of opportunity triggers concerns about social justice and economic performance. This paper presents indirect evidence suggesting that the same factors causing overall income inequality to increase also are likely to have increased inequality of opportunity. Drawing on the experience of countries in the OECD and in Latin America, the paper concludes that greater fiscal progressivity and broad-based investments in education can be effective in reducing the inequality of opportunity without adverse effects on economic growth.