Making outcomes more equal can advance equality of opportunity

post by Bill Gardner

Paul and I have written recently about two different ways of understanding egalitarianism: equality of outcomes and equality of opportunity. Americans may be more sympathetic to the ideal of equal opportunity than equal outcomes. For example, Larry Summers:

Perhaps the debate and policy focus needs to shift from inequality in outcomes, where attitudes divide sharply and there are limits to what can be done, to inequalities in opportunity. It is hard to see who could disagree with the aspiration to equalize opportunity, or fail to recognize the manifest inequalities in opportunity today.

Policies that are targeted primarily at equality of opportunity, like No Child Left Behind, have bipartisan support in the US. Policies that equalize outcomes, like increasing the progressivity of the tax code, do not.

The thing is, it might be that making outcomes more equal for young families improves equality of opportunity for their children. Here's some evidence for this. Brendan Saloner wrote about a fascinating paper by Hoynes, Miller, and Simon about how increases in income for poor families improve birth outcomes for their children. These authors looked at the association between increases in the generosity of the Earned Income Tax Credit (EITC) -- which happened in 1986, 1990, and 1993 -- and changes in birthweights for infants.

We find that increased EITC income reduces the incidence of low birth weight and increases mean birth weight. For single low education (<= 12 years) mothers, a policy-induced treatment on the treated increase of $1000 in EITC income is associated with a 6.7 to 10.8 percent reduction in the low birth weight rate. Our results suggest that part of the mechanism for this improvement in birth outcomes is the result of more prenatal care, and less negative health behaviors (smoking). 

Being born more or less at term and at a reasonable weight is a marker for successful prenatal development. Many people believe that successful early development is critical for later development of life and workplace skills. In particular, James Heckman argues that 

interventions early in the life cycle of disadvantaged children have much higher economic returns than later interventions such as reduced pupil-teacher ratios, public job training, convict rehabilitation programs, adult literacy programs, tuition subsidies or expenditure on police. 

Heckman believes that the earlier the intervention, the greater the per-dollar lifetime benefit for the child. And an intervention that affects prenatal development is as early as you can get. So it is possible that among the most effective ways to increase equality of opportunity is to reduce inequality of outcomes among young families. 

Like most Americans, I have a strong preference of policies that favor equality of opportunity. But a preference for such measures should also lead to support for certain policies that equalize outcomes for parents of young children, such as the EITC and paid maternal leave.

 

Comments

[Brendan Saloner]

I've been hooked on what you and Paul are writing on this topic.

You say: "So it is possible that among the most effective ways to increase equality of opportunity is to reduce inequality of outcomes among young families."

Most people would be glad for social policies to promote both equality of opportunity and to decrease inequality of outcomes. The tricky cases, which I think Paul alluded to, are those where the two goals work in opposite directions. Plenty of thought experiments come to mind, what if the best way to reduce low birthweight was to give more money to low-income fathers? (imagine that doing so got more fathers to invest time in their children, but also decreased the bargaining power of mothers, increasing gender inequality), or if giving vouchers to wealthier children to get them to attend head start increased the cognitive outcomes of low-income children? Or if the EITC was only given to parents whom the government determined were "diamonds in the rough," potential high achievers that were caught in poverty? (since their children would surge ahead with a bit more money and raise the prospects of other poor children with less talented parents)

There is something a bit unpleasant about each of these thought experiments, but it is not obvious to me that increasing current inequality of outcomes is ruled out in favor of promoting future equality of opportunity in any of these cases. What do you think?