Mexico is a country with high levels of inequality and low intergenerational
social-mobility rates for those located at the bottom extremes of the wealth
distribution. Although such low rates suggest that at least a share of the
observed income inequality may be due to an unequal distribution of
opportunities, this conjecture has not been thoroughly tested in the
literature. The present article fills this gap estimating the lower bound of
the contribution of unequal opportunities to income and wealth inequality
in Mexico, with an operationalization of the “ex-ante” approach to the
measurement of inequality of opportunity. Relying on a national
representative survey designed for the analysis of social mobility, namely,
the ESRU Survey on Social Mobility in Mexico (2011), we are able to define
a broad set of circumstance groups (“types”), encompassing the wealth of
the household of origin. This available information reduces the omitted
variable bias of previous estimations and allows for a better account of the
role of inequality of opportunity in income inequality. Our results show that
the lower bound of the contribution of unequal opportunities to total
income inequality and total wealth inequality is around 30 per cent, which
is substantially higher than previous estimations for Mexico and ranks
among the highest values in Latin America.
Measurement of inequality of opportunity: A normative approach