Inequality of opportunities: Interpretation, methods and problems of estimation

In: Vestnik Sankt-Peterburgskogo universiteta: naučno-teoretičeskij žurnal. Serija 5, Ėkonomika, Band 36, Heft 4, S. 624-652

Abstract

The topic of this research is the theory of equal opportunities and its application to the relationship between inequality and economic development. The relevance of the work is due, first, to the fact that inequality grows throughout the world, creating conditions for the growth of social tension; second, to the lack of general consensus on the direction of the relationship between inequality and economic growth; and third, to contradictory results of empirical studies on this issue. The main hypothesis of the study is that these theoretical and empirical contradictions can be resolved by dividing inequality into two components —inequality of opportunity and inequality of effort — and studying their impact on economic growth separately. The idea of distinguishing between inequality of opportunity and inequality of effort is a core part of the theory of equal opportunities. The paper briefly reviews the roots, development, and current state of the theory. Methods for measuring inequality of opportunities have been developed and tested on microdata from many countries, including Russia. Also, at the theoretical level, mechanisms of the negative impact of inequality of opportunities and the positive impact of inequality of efforts on economic growth have been identified. At the same time, there are very few empirical studies dealing with the relationship between inequality of opportunity, inequality of effort, and economic growth. In practical terms, studies of the inequality of opportunity are important because they shift the goals and priorities of public policy from equalizing outcomes to equalizing opportunities. This makes it possible to move towards a more just and rapidly developing society.