Page 172 - Contributed Paper Session (CPS) - Volume 1

CPS1254 Yu Jin et al.

Figure 2 The trend of change of inequality of opportunity

This paper focuses on the proportion of opportunity in inequality of
income, that is, to what extent does inequality of opportunity create inequality
of income. Part A is the absolute value of inequality of opportunity. The results
obtained by using three different counterfactual distribution methods are
similar and indicate that inequality of opportunity faced by our residents in
gaining income has shown a trend of rising first and then decreasing slightly
in the past decade. In recent years, the trend has tended to be gentle and staid
at a higher value. The results show that the "environment" factors determine
the level of personal income to a large extent. Having a better environment
means that people with better opportunities are more likely to earn higher
incomes. Part B is the relative value of inequality of opportunity. It is the ratio
of inequality of opportunity to income inequality. The relative value is
determined by the growth rate of inequality of opportunity and inequality of
income. The trend of the relative value is the same as the absolute value of
inequality of inequality. All in all, it can be seen that the degree of inequality
of opportunity faced by our residents in gaining income is higher and its
growth rate is faster than income inequality’s. In other words, the degree of
effort in individual work is weakening in determining the level of income.
Excessive degree of inequality of opportunity will reduce people's enthusiasm
and passionfor work, and thus hamper people's incentive to accumulate their
human capital.

4. Discussion and Conclusion
Compared with income inequality, the problem of inequality of
opportunity is more practical and important. The more practical reason is that
the old saying goes, “Inequality rather than want is the cause of trouble”. The
essence of people's complaints about income inequality is dissatisfaction with
the unequal opportunities they encounter in obtaining income. If the income
gap is caused entirely by different degrees of individual efforts, then there is
no doubt about it. More importantly, the impact of inequality of opportunity
on income inequality is rising. Secondly, inequality of opportunity will

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