Inequality in Earnings and Adverse Shocks in Early Adulthood

Adoho, Franck M. ; Tien, Bienvenue N.

World Bank, Washington, DC

关键词: INEQUALITY;    ADVERSE SHOCKS;    EARLY ADULTHOOD;    INEQUALITY OF OPPORTUNITY;    WAGES;   

DOI  :  10.1596/1813-9450-8538
RP-ID  :  WPS8538

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The inequality of opportunity theorypostulates that achievement gaps arising because of factorsbeyond the individual's control are morallyunacceptable and should therefore be compensated by society.These factors or circumstances range from theindividual's social background to adverse shocks. Moststudies have focused on the contribution of socialbackground and genetic and other childhood-relatedcircumstances to inequality of opportunity. Borrowinginsights based on the impressionable years hypothesis insocial psychology, this paper tests how exposure to adverseshocks, such as war, in early adulthood (ages 18-25) affectsthe individual's future labor earnings and subsequentlycontributes to earnings inequality. The application to theDemocratic Republic of Congo is associated with twosignificant takeaways. First, all else equal, individualswho experience intensely violent conflict at a young ageearn significantly less than their counterparts. Second,after controlling for the individual's socialbackground, the share of overall inequality in earningsaccounted for by the experience of adverse shocks in earlyadulthood is not negligible, ranging from 2.5 to 3.5percent. These insights broaden our understanding in thediscussion on inequality of opportunity and represent a newpath in the design of allocation policies that seek toreduce inequality and poverty.