More than half of India’s income inequality is estimated to be associated with circumstances beyond an individual’s control. According to the Global Estimates of Opportunity and Mobility (GEOM) database, 53 percent of income inequality in the country can be traced to circumstances including gender, caste, state of birth and parents’ education. This is well above the global average of 41 percent, suggesting that where a person starts in life may substantially shape where they end up.
Yet India has no official measure of inequality of opportunity, leaving policymakers without a government-owned estimate of the extent to which circumstances beyond an individual’s control shape economic outcomes.
From Outcomes to Opportunity
India's conventional measures of inequality focus on outcomes: who ends up with more, and who with less. These measures are typically based on household expenditure.
Inequality of opportunity (IOp) asks a related but distinct question: how much of an observed gap is associated with circumstances beyond an individual's control? Consider two individuals making similar efforts: one born in Maharashtra to parents who are doctors, the other born in Bihar to parents who are casual labourers. Their access to quality schooling, healthcare, professional networks and employment opportunities may differ substantially. IOp seeks to capture the share of the resulting difference in outcomes associated with circumstances they did not choose.
The Persistence of Advantage
World Bank data on intergenerational mobility provide a related perspective. Estimates for India indicate strong persistence in income across generations, suggesting that economic advantage and disadvantage are transmitted substantially from parents to children.
The same database’s estimates of education mobility show that only 8.7 percent of children whose parents fell in the bottom half of the educational distribution went on to reach the top quarter of educational attainment themselves. By contrast, a child born to parents already in the top quarter had roughly a 59 percent chance of remaining there.
Making Opportunity Legible to Policy
India’s outcome inequality is tracked and reported regularly, but IOp has no equivalent reporting mechanism. Available estimates come from global databases based on household surveys conducted years ago, leaving no government agency responsible for producing or regularly updating an official estimate.
The government should therefore develop an official measure of IOp that can be incorporated into India’s statistical and policy framework. This need not require entirely new data infrastructure. The Periodic Labour Force Survey (PLFS), or another regularly conducted nationally representative household survey, could incorporate a module capturing relevant circumstances, including parental education and occupation. Repeated collection of such information would allow India to give opportunity inequality an institutional home, able to compete for policy and budgetary attention.
The Next Generation Test
Equality cannot be judged only by the distribution of outcomes. It also depends on whether circumstances people do not choose – including gender, caste, family background and place of birth – continue to determine the opportunities available to them.
For India, that means judging progress not only by where people end up, but also by how much their circumstances at birth continue to shape where they can go.