The Gini and Mean Log Deviation Indices of Multivariate Inequality of Opportunity

Abstract

The most common approach to measuring inequality of opportunity in income is to apply the Gini inequality index or the Mean Log Deviation (MLD) index to a smoothed distribution (i.e., a distribution of type mean incomes). We show how this approach can be naturally extended to include life outcomes other than income (e.g., health, education). We propose two measures: the Gini and MLD indices of multivariate inequality of opportunity. We show that they can be decomposed into the contribution of each outcome and the dependence of the outcomes. Using these measures, we calculate inequality of opportunity in health and income across European countries.