On equality of opportunities and equality of outcomes

post by Bill Gardner

This terrific graph was posted by Dylan Matthews (the graph is from Miles Corak). Matthews used it to make this point:

the distinction between equality of opportunity (usually phrased in terms of upward income mobility) and equality of outcomes (the raw distribution of income or wealth in an economy) is not as big as it sometimes appears. More specifically, countries with high inequality of outcomes (as measured by the Gini index of economic inequality) tend to have low social mobility (as measured by the association between parents’ and childrens’ incomes) as well.

He concludes that

The distinction between equality of outcomes and opportunity has some theoretical appeal, but in practice, you get both or neither.

However, the distinction between equality of outcomes and equality of opportunity is of more than theoretical importance. These phrases pick out answers to the question of why inequality is unfair, and different motivations for action to reduce inequality. (You can, of course, care about both kinds of inequality. Or neither.)

Even more importantly, the phrases point to different social policies. If you care about the inequality of outcomes, the natural course of action is to redistribute income or wealth from the haves to the have-nots. If you care about the inequality of opportunities, a natural course of action is seek the equalization of health and education for children, as does Larry Summers in the target article that prompted Matthews' post. Or, as James Heckman argues, you should intervene before public school begins.

These policies are very different. On the one hand, their direct effects benefit different people. Most inequality of outcomes policies benefit adults, whereas inequality of opportunities policies generally benefit children (i.e., the next generation of adults). There is also a difference in time frame. A policy targeting inequality of outcomes can take effect as soon as the beneficiary cashes a check. A policy targeting inequality of opportunity takes effect over a generation, if it ever does.

So if the policies are very different, why do we get either both equality of opportunity and equality of outcomes (Scandinavia, to a lesser degree, Canada), or neither form of equality (South America, to a lesser degree, the United States)? I don't know, but there is an obvious possibility. If your government and culture consistently supports child health and education across generations, this should reduce inequality of opportunity, and equalizing opportunity will reduce inequality of outcomes. 

Comments

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