Thursday, May 24, 2012

Chris Dillow — The Weak Demand For Equal Opportunity

It's commonly thought that people are more likely to accept income inequalities if they believe these arise from equality of opportunity.For example, some attribute the relative weakness of the US welfare state to the fact that Americans believe (wrongly) that the poor have plenty of chances (pdf) to get ahead.
 But what exactly is the link between perceptions of fair opportunity and demand for fair outcomes? Some experiments by Eugenio Proto and colleagues at Warwick University shed some worrying light... 
In other words, what people value most is having some chance - 1% versus nothing. Having greater opportunity - moving from a 20% to 50% chance isn't so valuable, in the sense that it doesn't so much affect bargaining behaviour. 
This has (at least) two implications. 
One is that it shows that people value procedural utility; having some chance to affect the outcome is what matters to them, rather than having a big chance. 
The other is that, once some small chance exists, people don't greatly care about equalizing chances. They care more about having a small chance than about increasing their chances. 
These laboratory experiments confirm what we see in public opinion - that, like it or not, there is little demand for policies that would greatly equalize opportunity, such as abolishing private education or steep inheritance taxes. 
I don't know why this is; I suspect it's related to the certainty effect. But surely lefties should be disquieted by the fact that egalitarian impulses can be bought off so cheaply even in laboratory conditions.
Read it at Stumbling and Munmbling
The Weak Demand For Equal Opportunity
by Chris Dillow | Investors Chronicle (UK)

Seems to be borne out in the US. As long people believe that there is chance for upward mobility, apparently even if it's only by hitting the lottery, most are OK with pretty extreme distributional inequality. Not promising for political or institutional reform.

1 comment:

Matt Franko said...

"It's commonly thought that people are more likely to accept income inequalities if they believe these arise from equality of opportunity.For example, some attribute the relative weakness of the US welfare state to the fact that Americans believe (wrongly) that ."

Sounds like what we were corresponding about this afternoon Tom.

"Fairness" vs "Equity"

but a key phrase is here: "the poor have plenty of chances to get ahead"

"10 dogs after 9 bones" and MMT prove that this is irrefutably false; by mathematical certainty.

resp,