Quantifying the Progress of Economic and Social Justice: Charting Changes in Equality of Opportunity in the USA, 1960–2000

Abstract

The notion of equality of opportunity (EO) has pervaded much of economic and social justice policy, and research over the last half century. The sense that differences in agent outcomes that are the consequence of their individual choice and effort are acceptable whereas variation in agent outcomes that are the consequence of circumstances beyond their control are not has underpinned much gender, race, education, and family law and policy over that period, making it a many-dimensioned issue. In this context, the empirical analysis of EO has been hampered in the sense that the usual techniques are one-dimensional in nature. Here a new approach to evaluating levels of and changes in EO which readily accommodates these many dimensions is introduced, and progress in the extent of EO for 18-year-olds in the USA is examined over the period 1960–2000. The evidence is that gains were made in all categories throughout the period, more so for males than females (though females were better off in an EO sense to start with), more so for children in single parent circumstances, and more so for the poorly endowed.

Keywords:

• Overlap measure
• Stochastic dominance
• Equality of opportunity

Acknowledgements

The authors would like to thank the editor and anonymous referees for their very helpful comments, and the participants at the 2015 Human Development and Capability Association (HDCA) conference in Washington, DC.

Disclosure Statement

No potential conflict of interest was reported by the authors.

About the Authors

Gordon Anderson was educated at the University of Newcastle Upon Tyne (BA 1972) and at the London School of Economics and Political Science (MSc Econometrics and Mathematical Economics 1974 and Ph.D. Applied Econometrics 1980). Various research, teaching, and administrative appointments: Southampton University, McMaster University and the University of Toronto. Research awards: Bowley Prize, The Sayers Prize (University of London), Journal of Applied Econometrics Distinguished Author Award, Connaught Senior Research Fellowship. Editorial Board memberships: Review of Income and Wealth, the Journal of Economic Inequality. Research interests: empirical welfare analysis in the form of measuring and making inferences about well-being, social justice, poverty, inequality, equality of opportunity, polarization.

Teng Wah Leo is an associate professor in economics at St. Francis Xavier University, Antigonish, Nova Scotia, Canada. His research focuses on the empirical examination of changes in equality of opportunity, and patterns in marital matching, with emphasis on both methodological and theoretical issues.

Notes

1. See Arneson (1989), Cohen (1989), Dworkin (1981a), Dworkin (1981b), Dworkin (2000), Roemer (1998), Roemer et al. (2003), and Roemer (2006) for the philosophical foundations.

2. As such it can also be construed as part of an agenda associated with advocates of a functionings and capabilities approach to societal well-being, and human development human development (Nussbaum 2011; Sen 2009).

3. Indeed in terms of the nature versus nurture debate, it is doubtful that resemblances due to nature can be totally eliminated or compensated for.

4. Equal opportunity programmes observed amongst Western societies do seem to be of this flavour. For example, when questioned on the widening gap between the rich and poor, the British Prime Minister responded that:

 … the issue is not in fact whether the very richest person ends up being richer. The issue is the poorest person is given the chance they don't otherwise have. The most important thing is to level up, not level down.

Interview with the Prime Minister on BBC News Newsnight on 4 June 2001. Transcript available from http://news.bbc.co.uk/2/hi/events/newsnight/1372220.stm.

5. Much time is spent in introductory statistics courses stressing that, while independence implies zero covariance, zero covariance (the basis of inference on ) does not imply independence! Think about an exact non-independent relationship for (a fairly plausible technology), with parent quality uniformly distributed in . A random sample of agents from this would yield zero covariance between and , and hence a zero estimate of implying independence for what is a completely dependent relationship.

6. While parent–child education relationships are clearly monotonic it is not clear that other relationships, e.g. parental income–child education are not necessarily monotonic given notions of diminishing marginal returns to scale in investment in education.

7. The Overlap Measure proposed in this paper can be adapted to the three conceptions of intergenerational mobility suggested by Van de Gaer, Schokkaert, and Martinez (2001), since each transition matrix implies a particular structure for the joint density matrix, which the empirical joint density can be measured against. Further, the third mobility measure for Markov chains proposed by Van de Gaer, Schokkaert, and Martinez (2001) is related to the Overlap Measure in the sense that it measures the complement to the overlapping region of the conditional probabilities.

8. Appendix 1 provides a brief description of how the measure is estimated. These indices are confined to the unit interval with proximity to one representing the ultimate in social justice however defined.

9. Anderson (1999), Cavanagh (2002), Hurley (1993), Piketty (2000), and Swift (2005) are some opponents.

10. Studies into the effect of divorce law changes include the following: (a) divorce rates (Allen 1992; Friedberg 1998; Peters 1986, 1992; Wolfers 2006), (b) marriage rates (Rasul 2006), (c) child outcomes (Gruber 2004; Johnson and Mazingo 2000), (d) marriage-specific investments (Stevenson 2007), and (e) domestic violence rates (Stevenson and Wolfers 2006).

11. Studies of the effect of custodial law changes include (a) implications for a non-custodial parent's willingness to make child custody payment (Del Boca and Ribero 1998; Weiss and Willis 1985), and (b) implications for divorce and marriage rates, and consequent impact on child investments (Brinig and Buckley 1998; Halla 2013; Halla and Holzl 2007; Leo 2008; Nunley and Seals 2009; Rasul 2006).

12. Anderson, Leo, and Muelhaupt (2014) showed that in a constrained world with no growth in average child outcomes, movement towards an equal opportunity outcome for one group of children must necessarily make another group of children worse off.

13. Interestingly, some school boards met the equality mandate by penalizing white schools. King George County, Virginia, for example, chose to equalize its curriculum by dropping several advanced courses from its White high school rather than add them at the Black school, an example of a symmetric equal opportunity policy which we argue is not generally observed in the 1960–2000 period.

14. The respective coded parental marital status responses are as follows: married, spouse present is 1; married, spouse absent is 2; separated is 3; divorced is 4; widowed is 5; never married/single is 6. This paper does not examine children born outside of wedlock, nor marriages where one parent is “missing” (responses 2 and 6).

15. Nonetheless, the results for children of age 16 and 17 are similar and are available from the authors upon request. However, this is quite different from more traditional approaches to generational relationships where the outcomes of offspring are related to parental outcomes at similar points in the life cycle. If rates and periods of development differ by gender or race, some of the offspring differences observed here could be quite different if observed at a later stage of the life cycle.

16. When considering pure EO measures, and mobility by family structure, a first concern is whether differing familial household structures have different transition structures. By comparing the overlap of the joint densities of intact versus single, and widowed versus divorced/separated parent families, the possibility of common transit structures was examined. Here, an overlap of 1 implies a common transit structure, and a value of less than 1 implies otherwise. The hypothesis of common transitional structures was rejected in every case; the results are available from the authors on request.

17. These results are similar to those for Canada (Anderson, Leo, and Muelhaupt 2014).

18. This test corresponds to those presented by Lefranc et al. (2008, 2009), though in this case the respective circumstance classes are race and gender.