On the Welfare Loss Caused by Inequality of Opportunity
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On the Welfare Loss Caused by Inequality of OpportunityDate
2014Citation
Calo-Blanco, A., García-Pérez, J.I. On the welfare loss caused by inequality of opportunity. J Econ Inequal 12, 221–237 (2014). https://doi.org/10.1007/s10888-013-9247-6
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https://doi.org/10.1007/s10888-013-9247-6
Abstract
[Abstract] Based on the ethical principle of equality of opportunity, this paper presents a measure of the welfare loss that is caused by an unfair distribution of a particular outcome (income, health, education, etc). The key idea is that a fair society should produce outcomes that depend on individuals’ effort and not on their external circumstances such as gender, socioeconomic background, etc. We propose measuring inequality of opportunity as the welfare loss attributed to the outcome differences among individuals who exert a similar level of effort. Our results are in line with those aspects of fairness literature that give priority to the ex post compensation approach to equality of opportunity. Finally, we present an empirical application for the measurement of the welfare loss in the income distribution in Europe. We have observed a high degree of heterogeneity among European countries. The welfare loss due to inequality of opportunity ranges in those, from basically zero to almost one fifth of their potential welfare.
Keywords
Equality of opportunity
Income distribution
Ex post compensation
Welfare loss
Income distribution
Ex post compensation
Welfare loss
Description
This AAM has been accepted for publication, after peer review (when applicable) and is subject to Springer Nature’s AM terms of use, but is not the Version of Record and does not reflect post-acceptance improvements, or any corrections. The Version of Record is available online at: https://doi.org/10.1007/s10888-013-9247-6
Editor version
ISSN
1573-8701
1569-1721
1569-1721