IDEAS home Printed from https://ideas.repec.org/a/aea/jeclit/v54y2016i4p1288-1332.html
   My bibliography  Save this article

Equality of Opportunity: Theory and Measurement

Author

Listed:
  • John E. Roemer
  • Alain Trannoy

Abstract

During the last third of the twentieth century, political philosophers actively debated about the content of distributive justice; the ruling ethical view of utilitarianism was challenged by various versions of equality of opportunities. Economists formulated several ways of modeling these ideas, focusing upon how individuals are placed with respect to opportunities for achieving various outcomes, and what compensation is due to individuals with truncated opportunities. After presenting a review of the main philosophical ideas (section 2), we turn to economic models (sections 3 and 4). We propose a reformulation of the definition of economic development, replacing the utilitarian measure of GDP per capita with a measure of the degree to which opportunities for income acquisition in a nation have been equalized. Finally, we discuss issues that the econometrician faces in measuring inequality of opportunity, briefly review the empirical literature (section 6), and conclude (section 7).

Suggested Citation

  • John E. Roemer & Alain Trannoy, 2016. "Equality of Opportunity: Theory and Measurement," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1288-1332, December.
  • Handle: RePEc:aea:jeclit:v:54:y:2016:i:4:p:1288-1332
    Note: DOI: 10.1257/jel.20151206
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/articles?id=10.1257/jel.20151206
    Download Restriction: no

    File URL: https://www.aeaweb.org/articles/attachments?retrieve=dSZSVDffXXGm-Ajr41aRCRxtjoSlmnRQ
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bossert W., 1996. "Redistribution mechanisms based on individual characteristics," Mathematical Social Sciences, Elsevier, vol. 31(1), pages 51-51, February.
    2. Marrero, Gustavo A. & Rodríguez, Juan G., 2013. "Inequality of opportunity and growth," Journal of Development Economics, Elsevier, vol. 104(C), pages 107-122.
    3. John Weymark, 2003. "Generalized Gini Indices of Equality of Opportunity," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 1(1), pages 5-24, April.
    4. Jaime Saavedra-Chanduví & José R. Molinas & Ricardo Paes de Barros & Francisco H. G. Ferreira, 2009. "Measuring Inequality of Opportunities in Latin America and the Caribbean," IDB Publications (Books), Inter-American Development Bank, number 361, August.
    5. John E. Roemer, 2014. "Economic Development as Opportunity Equalization," World Bank Economic Review, World Bank Group, vol. 28(2), pages 189-209.
    6. Denis Cogneau & Sandrine Mesplé-Somps, 2008. "Inequality of Opportunity for Income in Five Countries of Africa," Working Papers DT/2008/04, DIAL (Développement, Institutions et Mondialisation).
    7. Walter Bossert, 1996. "Opportunity sets and individual well-being," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 14(1), pages 97-112.
    8. Francisco H. G. Ferreira & Jérémie Gignoux, 2011. "The Measurement Of Inequality Of Opportunity: Theory And An Application To Latin America," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57(4), pages 622-657, December.
    9. Nicolas Pistolesi, 2009. "Inequality of opportunity in the land of opportunities, 1968–2001," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 7(4), pages 411-433, December.
    10. Aaberge, Rolf & Mogstad, Magne & Peragine, Vito, 2011. "Measuring long-term inequality of opportunity," Journal of Public Economics, Elsevier, vol. 95(3), pages 193-204.
    11. repec:spr:sochwe:v:49:y:2017:i:3:d:10.1007_s00355-017-1044-x is not listed on IDEAS
    12. Alain Trannoy & Sandy Tubeuf & Florence Jusot & Marion Devaux, 2010. "Inequality of opportunities in health in France: a first pass," Health Economics, John Wiley & Sons, Ltd., vol. 19(8), pages 921-938, August.
    13. Daniele Checchi & Vito Peragine, 2010. "Inequality of opportunity in Italy," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 429-450, December.
    14. Marc Fleurbaey & Vito Peragine, 2013. "Ex Ante Versus Ex Post Equality of Opportunity," Economica, London School of Economics and Political Science, vol. 80(317), pages 118-130, January.
    15. Lefranc, Arnaud & Pistolesi, Nicolas & Trannoy, Alain, 2009. "Equality of opportunity and luck: Definitions and testable conditions, with an application to income in France," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1189-1207, December.
    16. Fleurbaey, Marc, 2012. "Equal Opportunity, Reward And Respect For Preferences: Reply To Roemer," Economics and Philosophy, Cambridge University Press, vol. 28(02), pages 201-216, July.
    17. Efe A. Ok & Laurence Kranich, 1998. "The measurement of opportunity inequality: a cardinality-based approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 15(2), pages 263-287.
    18. Pedro Rosa Dias, 2010. "Modelling opportunity in health under partial observability of circumstances," Health Economics, John Wiley & Sons, Ltd., vol. 19(3), pages 252-264.
    19. Roemer, John E. & Aaberge, Rolf & Colombino, Ugo & Fritzell, Johan & Jenkins, Stephen P. & Lefranc, Arnaud & Marx, Ive & Page, Marianne & Pommer, Evert & Ruiz-Castillo, Javier, 2003. "To what extent do fiscal regimes equalize opportunities for income acquisition among citizens?," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 539-565, March.
    20. Frédéric Chantreuil & Alain Trannoy, 2013. "Inequality decomposition values: the trade-off between marginality and efficiency," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(1), pages 83-98, March.
    21. Florence Jusot & Sandy Tubeuf & Alain Trannoy, 2013. "Circumstances And Efforts: How Important Is Their Correlation For The Measurement Of Inequality Of Opportunity In Health?," Health Economics, John Wiley & Sons, Ltd., vol. 22(12), pages 1470-1495, December.
    22. M. Fleurbaey., 2012. "Beyond GDP: The Quest for a Measure of Social Welfare," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 3.
    23. Olivier Bargain & André Decoster & Mathias Dolls & Dirk Neumann & Andreas Peichl & Sebastian Siegloch, 2013. "Welfare, labor supply and heterogeneous preferences: evidence for Europe and the US," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 41(4), pages 789-817, October.
    24. Alkire, Sabina, 2005. "Valuing Freedoms: Sen's Capability Approach and Poverty Reduction," OUP Catalogue, Oxford University Press, number 9780199283316.
    25. Judith Niehues & Andreas Peichl, 2014. "Upper bounds of inequality of opportunity: theory and evidence for Germany and the US," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(1), pages 73-99, June.
    26. Kranich, Laurence, 1996. "Equitable Opportunities: An Axiomatic Approach," Journal of Economic Theory, Elsevier, vol. 71(1), pages 131-147, October.
    27. Fleurbaey, Marc & Schokkaert, Erik, 2009. "Unfair inequalities in health and health care," Journal of Health Economics, Elsevier, vol. 28(1), pages 73-90, January.
    28. Elisha A. Pazner & David Schmeidler, 1978. "Egalitarian Equivalent Allocations: A New Concept of Economic Equity," The Quarterly Journal of Economics, Oxford University Press, vol. 92(4), pages 671-687.
    29. Parijs, Philippe Van, 1997. "Real Freedom for All: What (if Anything) Can Justify Capitalism?," OUP Catalogue, Oxford University Press, number 9780198293576.
    30. Pedro Rosa Dias, 2009. "Inequality of opportunity in health: evidence from a UK cohort study," Health Economics, John Wiley & Sons, Ltd., vol. 18(9), pages 1057-1074.
    31. Prasanta K. PATTANAIK & Yongsheng XU, 1990. "On Ranking Opportunity Sets in Terms of Freedom of Choice," Discussion Papers (REL - Recherches Economiques de Louvain) 1990036, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    32. Muller, Christophe & Trannoy, Alain, 2011. "A dominance approach to the appraisal of the distribution of well-being across countries," Journal of Public Economics, Elsevier, vol. 95(3), pages 239-246.
    33. Ok, Efe A., 1997. "On Opportunity Inequality Measurement," Journal of Economic Theory, Elsevier, vol. 77(2), pages 300-329, December.
    34. Bertil Tungodden, 2005. "Responsibility and redistribution: The case of first best taxation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 24(1), pages 33-44, June.
    35. Fleurbaey, Marc, 2012. "Fairness, Responsibility, and Welfare," OUP Catalogue, Oxford University Press, number 9780199653591.
    36. Stephen G. Donald & David A. Green & Harry J. Paarsch, 2000. "Differences in Wage Distributions Between Canada and the United States: An Application of a Flexible Estimator of Distribution Functions in the Presence of Covariates," Review of Economic Studies, Oxford University Press, vol. 67(4), pages 609-633.
    37. repec:dau:papers:123456789/5065 is not listed on IDEAS
    38. Anders Björklund & Markus Jäntti & John Roemer, 2012. "Equality of opportunity and the distribution of long-run income in Sweden," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 39(2), pages 675-696, July.
    39. Francisco Ferreira & Jérémie Gignoux & Meltem Aran, 2011. "Measuring inequality of opportunity with imperfect data: the case of Turkey," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(4), pages 651-680, December.
    40. Ricardo Paes de Barros & Francisco H.G. Ferreira & Jose R. Molinas Vega & Jaime Saavedra Chanduvi, 2009. "Measuring Inequality of Opportunities in Latin America and the Caribbean," World Bank Publications, The World Bank, number 2580, September.
    41. Anthony Shorrocks, 2013. "Decomposition procedures for distributional analysis: a unified framework based on the Shapley value," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(1), pages 99-126, March.
    42. Fleurbaey Marc, 1995. "Three Solutions for the Compensation Problem," Journal of Economic Theory, Elsevier, vol. 65(2), pages 505-521, April.
    43. repec:idb:brikps:60098 is not listed on IDEAS
    44. repec:dau:papers:123456789/268 is not listed on IDEAS
    45. Vito Peragine, 2004. "Ranking Income Distributions According to Equality of Opportunity," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 2(1), pages 11-30, April.
    46. Paul Hufe & Andreas Peichl & John Roemer & Martin Ungerer, 2017. "Inequality of income acquisition: the role of childhood circumstances," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(3), pages 499-544, December.
    47. Roemer, John E., 2015. "Kantian optimization: A microfoundation for cooperation," Journal of Public Economics, Elsevier, vol. 127(C), pages 45-57.
    48. Kurt Devooght, 2008. "To Each the Same and to Each his Own: A Proposal to Measure Responsibility-Sensitive Income Inequality," Economica, London School of Economics and Political Science, vol. 75(298), pages 280-295, May.
    49. Roemer, John E., 2012. "On Several Approaches To Equality Of Opportunity," Economics and Philosophy, Cambridge University Press, vol. 28(02), pages 165-200, July.
    50. Francisco H.G. Ferreira & Jérémie Gignoux, 2011. "The Measurement of Inequality of Inequality of Opportunity: Theory and an Application to Latin America," Post-Print halshs-00754503, HAL.
    51. Xavier Ramos & Dirk gaer, 2016. "Approaches To Inequality Of Opportunity: Principles, Measures And Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 30(5), pages 855-883, December.
    52. Damien Bricard & Florence Jusot & Alain Trannoy & Sandy Tubeuf, 2013. "Inequality of Opportunities in Health and the Principle of Natural Reward: Evidence from European Countries," Post-Print hal-01499643, HAL.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:eee:jmacro:v:55:y:2018:i:c:p:293-313 is not listed on IDEAS
    2. repec:bla:econom:v:84:y:2017:i:334:p:322-343 is not listed on IDEAS
    3. Abatemarco, Antonio & Stroffolini, Francesca, 2017. "The Economics of Justice as Fairness," EconStor Preprints 176843, ZBW - German National Library of Economics.
    4. John E. Roemer & Burak Ünveren, 2017. "Dynamic Equality of Opportunity," Economica, London School of Economics and Political Science, vol. 84(334), pages 322-343, April.

    More about this item

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:jeclit:v:54:y:2016:i:4:p:1288-1332. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael P. Albert). General contact details of provider: http://edirc.repec.org/data/aeaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.