Multidimensional inequality of opportunity

BEETHOVEN 2, Principal Investigator MARTYNA KOBUS

Alan Krueger, former chief economic adviser to President Obama, said during a speech at the Center of American Progress (December 1, 2012): "The increase in inequality over the past three decades in the United States has reached a point where income inequality is the cause of unequal distribution of opportunity, and is a threat to further economic growth. Equality of opportunity, unlike equality of outcomes, includes an element of individual responsibility. Individuals should have equal opportunities in the sense that factors beyond their control, such as the status of their parents, should not affect their outcomes in life, but only what a person decides to do in order to achieve well-being. This well-being, as indicated by the broad theoretical and empirical literature as well as the practice of governments and international organizations, is a multidimensional concept and cannot be reduced to income alone. Bourguignon et al. (2007), Fleurbaey and Shokkaert (2009), Ferreira and Peragine (2015) all indicate that moving beyond the one-dimensional assessment of unequal opportunities is a desirable direction for future research. This project deals with this topic. The main goal is to develop measurement methods and then, based on them, to perform empirical analyzes on multidimensional inequality of opportunities. This objective will be achieved through four specific objectives that correspond to the project packages. First, we will extend the existing theoretical model of equal opportunities with multiple dimensions. Secondly, we will develop measures of multidimensional inequality of opportunity and propose econometric methods for their application. Third, we will examine inequality of opportunity when the outcomes are income, wealth, and later also education and health, analyzed together. Fourth, we analyze the inequalities of opportunity in the life cycle, observations over time are additional dimensions. Mathematical methods used in economics will be used to develop the theory. Empirical analyzes will be conducted on the basis of the so-called SUR (Seemingly Unrelated Regressions) model with the extension that the relationship between random components is modeled on the basis of a cone.