Fair and unfair income inequality in Europe

This paper proposes an estimate of the extent of opportunity inequality and of its determinants in a sample of European countries. The present work aims to improve our understanding of the origin of standard income inequality, helping to identify the priorities of a redistributive policies and possible cases of inequality traps. Although the ranking among Northern European and Mediterranean countries is generally respected, our measures of equality of opportunity provide a different ranking with respect to the one offered by the measures of overall income inequality. Our figures also show that equality of opportunity might exhibit positive correlation with pre-primary education and de-tracked secondary school systems. Equality of opportunity is also positively associated to labour market regulation (with respect to gender differences only), to union density and to wage centralization whereas is positively related to fiscal redistribution.