Vito Peragine

Ex Ante Versus Ex Post Equality of Opportunity

We study the difference between the ex post and ex ante perspectives in equality of opportunity. We show that the well documented conflicts between compensation and reward are but an aspect of a broader conflict between ex ante and ex post perspectives. The literature that takes the goal of providing equal opportunities as the guiding principle generally considers that this is implemented only when, ex post, all individuals with the same effort obtain equal success. It is easy to believe that ex ante compensation is another natural embodiment of the same idea. We show that this is not true.

Measuring and implementing equality of opportunity for income

Abstract.Departing from the welfarist tradition, recent theories of justice focus on individual opportunities as the appropriate standard for distributive judgments. To explore how this philosophical conception can be translated into concrete public policy, we select the income as relevant outcome and the income tax as the relevant redistributive policy, and we address the following questions: (i) what is the degree of opportunity inequality in an income distribution? (ii) how to design an opportunity egalitarian income tax policy? Several criteria for ranking income distributions on the basis of equality of opportunities are derived. Moreover, we characterize an opportunity egalitarian income tax and we formulate criteria for choosing among alternative tax schedules.

The distributional incidence of growth: a social welfare approach

This paper provides a normative framework for the assessment of the distributional incidence of growth. By removing the anonymity axiom, such framework is able to evaluate the individual income changes over time and the reshuffling of individuals along the income distribution that are determined by the pattern of income growth. We adopt a rank dependent social welfare function expressed in terms of initial rank and individual income change and we obtain partial and complete dominance conditions over different growth paths. These dominance conditions account for the different components determining the overall impact of growth, that is the size of growth and its vertical and horizontal incidence. We then provide an empirical application for Italy: this analysis shows the distributional impact of the recent economic crisis suffered by the Italian populaltion.

Inequality of Opportunity in Europe: Is There a Role for Institutions? ☆

Abstract This paper studies the cross-country differences in conventional measures of inequality of opportunity in Europe in the space of individual disposable incomes. Exploiting two recent waves of the EUSILC database reporting information on family background (2005 and 2011), we provide estimates of inequality of opportunity in about 30 European countries for two sufficiently distant data points, allowing a check of consistency for country rankings. In addition, we exploit two observations available for most of the countries to explore the relationship between many institutional dimensions and inequality of opportunity, finding evidence of negative correlation with educational expenditure (especially at the pre-primary level) and passive labour market policies.

EX‐ANTE AND EX‐POST MEASUREMENT OF EQUALITY OF OPPORTUNITY IN HEALTH: A NORMATIVE DECOMPOSITION

This paper proposes and discusses two different approaches to the definition of inequality in health: the ex-ante and the ex-post approach. It proposes strategies for measuring inequality of opportunity in health based on the path-independent Atkinson equality index. The proposed methodology is illustrated using data from the British Household Panel Survey; the results suggest that in the period 2000-2005, at least one-third of the observed health equalities in the UK were equalities of opportunity.

Opportunity-Sensitive Poverty Measurement

This paper offers an axiomatic characterization of two classes of poverty measures that are sensitive to inequality of opportunity, one a strict subset of the other. The proposed indices are sensitive not only to income shortfalls from the poverty line, but also to differences in the opportunities faced by people with different predetermined characteristics, such as race or family background. Dominance conditions are established for each class of measures and a sub-family of scalar indices, based on a rank-dependent aggregation of type-specific poverty levels, is also introduced. In empirical analysis using household survey data from eighteen European countries in 2005, substantial differences in country rankings based on standard Foster-Greer-Thorbecke indices and on the new opportunity-sensitive indices are found. Cross-country differences in opportunity-sensitive poverty are decomposed into a level effect, a distribution effect, and a population composition effect.

The Distributional Incidence of Growth: A Non-Anonymous and Rank Dependent Approach

This paper provides a normative framework for the assessment of the distributional incidence of growth. By removing the anonymity axiom, such framework is able to evaluate the individual income changes over time and the reshuffling of individuals along the income distribution that are determined by the pattern of income growth. We adopt a rank dependent social welfare function expressed in terms of initial rank and individual income change and we obtain complete and partial dominance conditions over di¤erent growth paths. These dominance conditions account for the different components determining the overall impact of growth, that is the size of growth and its vertical and horizontal incidence.

Chapter 1 Compensation, Reward, and the Measurement of Unfair Inequalities

Purpose – In this chapter we discuss to what extent some of the measures of inequality of opportunity (IOp hereafter) proposed in the literature meet the reward and the compensation principles. Methodology – We study the direct unfairness and fairness gap measures proposed by Fleurbaey and Schokkaert (2009) and the ex ante and the ex post measures proposed by Checchi and Peragine (2010). As all the measures violate at least one of the principles, we propose a framework in order to quantify, for each solution, the violations of the property that it does not fully satisfy and we formulate the problem of choosing the measure that minimizes the violations of the principle not fully satisfied. Findings – This procedure is shown to be able to rationalize some of the existing measures of opportunity inequality and to obtain new measures of IOp.

Upward and Downward Bias When Measuring Inequality of Opportunity

We show that, when measuring inequality of opportunity with survey data, scholars incur two types of biases. A well-known downward-bias, due to partial observability of circumstances that affect individual outcome, and an upward bias, which depends on the econometric method used and the quality of the available data. We suggest a simple criterion to balance between the two sources of bias based on cross validation. An empirical application, based on 26 European countries, shows the usefulness of our method.

Inequality of Opportunity in Sub-Saharan Africa ⇤

In the last decades, inequality of opportunity has been extensively studied by economists on the assumption that, in addition to being normatively undesirable, it can be related to low potential for growth. This paper evaluates inequality of opportunity and the different sources of unequal opportunities in 11 Sub-Saharan Africa countries. The results indicate that the portion of total inequality that can be attributed to exogenous circumstances -- that is, circumstances outside the control of individuals control -- is between 30 percent and 40 percent in the countries considered. The results also indicate a positive association between total consumption inequality and inequality of opportunity. Finally, this paper addresses a number of methodological issues that typically arise when measuring inequality of opportunity with imperfect data, which is the typical case in developing countries.