Equality of opportunity: theory, measurement and policy implications

Abstract

In this report we present the Equality of opportunity approach, clarifying its theoretical foundations and empirical implications, and develop policy implications especially in the area of human capital investment. According to the equality of opportunity (EOp) approach, a primary goal of public policies is to insure that individuals develop their lives in a context where the playfield is levelled. The main idea behind EOp is that inequality in outcomes (e.g., income, wealth, human capital/education and health) is acceptable to the extent that it reflects the result of individual choices taken by individuals that share the same opportunities. According to the “equality of opportunities principle”, inequalities that are due to variables beyond individual’s control, called circumstances, (e.g. family socioeconomic and cultural background, ethnic origin, gender, age etc.), should be eliminated or compensated for by public intervention. Only those variables within the sphere of individual’s autonomy, called effort, (e.g., number of hours devoted to study or work, quality of the work supplied, occupational choices etc.) can justify a difference in the relevant outcome variable. This implies that the equality of opportunity approach is consistent with the notion of fair inequality, as long as it originates from effort.