Measuring Inequality of Opportunities in Latin America and the Caribbean

This study introduces new methods for measuring inequality of opportunities and makes an assessment of its evolution in Latin America over a decade. An innovative Human Opportunity Index and other parametric and non-parametric techniques are presented for quantifying inequality based on circumstances exogenous to individual efforts. These methods are applied to gauge inequality of opportunities in access to basic services for children, performance in key subjects for the youth and monetary income/consumption for adults, and provide innovative indices based on data that allows the comparison of the level of opportunities in 19 countries in the region. Until now, and unlike income or earnings inequality, no systematic measures have existed to summarize the level of inequality of opportunity observed in Latin America. This study aims to fill this gap, using two different techniques. The first develops a Human Opportunity Index to measure differences in opportunities among children. The second builds upon measures of income and consumption inequality, and estimates the share of current outcome inequality that can be explained by unequal opportunities. The Human Opportunity Index can be used to track a country s progress toward the goal of equal opportunities for all children in specific basic services defined as critical opportunities for future advancement in life, such as primary education and clean water. If the inequality of outcomes today significantly reflects past inequality of basic opportunities, it makes it all the more important for policymakers to be able to track the allocation of basic opportunities among children today, with a view of contributing to improve future outcomes.