Economic development and inequality of opportunity: Kuznets meets the Great Gatsby?

Ferreira, Francisco H. G. ORCID: 0000-0001-8926-0500, Moramarco, Domenico and Peragine, Vito (2026) Economic development and inequality of opportunity: Kuznets meets the Great Gatsby? Structural Change and Economic Dynamics, 76. 94 - 114. ISSN 0954-349X

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Abstract

According to the Kuznets hypothesis, inequality first tends to increase and then decrease as a country develops. Whether borne out empirically, this inverted-U Kuznets curve, as a stylized ‘fact’, has shaped the discourse on economic development and income inequality for decades. In this paper we investigate whether a similar relationship holds between national income per capita and inequality of opportunity: the inequality associated with inherited individual circumstances such as gender, ethnicity, and family background. As, empirically, inequality of opportunity is positively correlated with income inequality (a relationship known as the ‘Great Gatsby’ curve), the relationship between inequality of opportunity and ‘development’ is expected to display the same inverted-U shape. We suggest that the existence of a Kuznets inequality of opportunity curve can be the result of a ‘triangular’ relationship between development, income inequality, and inequality of opportunity. We then draw on the newly published Global Estimates of Opportunity and Mobility database to shed new light on this ‘triangular’ relationship, primarily in a cross-sectional context.

Item Type:	Article
Additional Information:	© 2025 The Author(s)
Divisions:	International Inequalities Institute
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HB Economic Theory
JEL classification:	D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources; Human Development; Income Distribution; Migration
Date Deposited:	05 Jan 2026 10:06
Last Modified:	09 Jan 2026 13:30
URI:	http://eprints.lse.ac.uk/id/eprint/130796

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