Inequality of Opportunity has emerged as a key determinant of economic growth in some recent studies outside India. It takes the form of a variety of circumstances in which an individual is born. By measuring inequality of opportunity in monthly per capita consumption expenditure (MPCE) for each state, this paper examines its relationship with economic growth in the Indian context. By taking the three circumstance variables of father’s education, caste identity, and sector of residence to define the inequality of opportunity share in the overall inequality, and using, as the other regressors, life expectancy and the initial level of income in the economy, we look at it as an explanatory variable in our growth equation. We also run a second specification wherein we replace share of inequality of opportunity with total inequality as our regressor. We find results from seventeen major states of India over the period from 1993-1994 to 2011-2012 indicating that inequality of opportunity has adverse effects on subsequent economic growth.
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Inequality of Opportunity has emerged as a key determinant of economic growth in some recent studies outside India. It takes the form of a variety of circumstances in which an individual is born. By measuring inequality of opportunity in monthly per capita consumption expenditure (MPCE) for each state, this paper examines its relationship with economic growth in the Indian context. By taking the three circumstance variables of father’s education, caste identity, and sector of residence to define the inequality of opportunity share in the overall inequality, and using, as the other regressors, life expectancy and the initial level of income in the economy, we look at it as an explanatory variable in our growth equation. We also run a second specification wherein we replace share of inequality of opportunity with total inequality as our regressor. We find results from seventeen major states of India over the period from 1993-1994 to 2011-2012 indicating that inequality of opportunity has adverse effects on subsequent economic growth.
