Roemer on Equality of Opportunity

Matthias Hild California Institute of Technology & Jet Propulsion Laboratory & Darden Graduate School of Business Administration Alex Voorhoeve Departments of Philosophy and Economics University College London June 2002

Address for correspondence: Darden Graduate School of Business Administration,

P.O. Box 6550, Charlottesville, VA 22906 (USA). Email: matthias@hild.org. Website: http://www.hild.org. Email: a.voorhoeve@ucl.ac.uk. Website: http://www.ucl.ac.uk/ uctyaev. We thank Brian Barry, Ken Binmore, Alex Brown, Jerry Cohen, Marc Fleurbaey, Dirk van de Gaer, Jeroen Knij, Peter Postl, John Roemer, Robert van der Veen, Peter Vallentyne, and Jo Wol for helpful discussions and comments on earlier drafts. Earlier versions of this paper were presented at the London University Graduate Conference, the Warwick Conference on Political Theory, the Analytical Philosophy National Postgraduate Conference in Reading, the Workshop on Equal Opportunity at the University of Bayreuth, and the Political Theory Seminar at Yale University. We thank the participants of these conferences for their comments. Alex Voorhoeves research was supported by the Dr. Hendrik Mullers Vaderlandsch Fonds, the Bisschosheim Stichting, the Radboudstichting Wetenschappelijk Onderwijsfonds, the UCL Graduate School and the AHRB.

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Abstract We critically discuss John Roemers normative principle of equal opportunity and advance opportunity dominance as an alternative criterion for the evaluation of policies. For Roemer, strict equality of opportunity obtains when people, irrespectively of circumstances beyond their control, have the same ability to achieve advantage through their free choices. To implement this idea, Roemer sorts people with similar circumstances into types and takes their free choices to be represented by their behaviour relative to other members of the same type or, as Roemer calls it, by their relative eort. He then proposes that society should maximize the average advantage of all those whose circumstances cause them to be least wello relative to others who have expended the same degree of relative eort. We argue that typing and the relative eort metric conate the factors for which we do and do not want to hold individuals responsible, whenever these factors are statistically correlated. Moreover, Roemers rule for policy selection burdens the concept of equal opportunity with foreign distributive principles. We also note that his selection rule is inecient, in the sense that it violates strong Paretooptimality. In response to these diculties, we advance the criterion of opportunity dominance, which is strongly Pareto optimal, maintains conceptual purity and does not conate the factors for which individuals should and should not be held responsible. This criterion determines a set of candidate policies that are undominated in opportunity and from which a nal policy must be selected by additional, conceptually distinct principles of distributive justice.

Keywords: equality of opportunity, fairness JEL classication: D63

1 INTRODUCTION

Introduction

Equality of opportunity gures prominently in debates on the nature of a just society and the achievement of some form of equal opportunity constitutes a professed goal of social policy in most Western democracies. Nonetheless, the precise meaning of this concept remains controversial. Conceptions of equality of opportunity range from the absence of discrimination on the basis of race or gender to the elimination of the inuence of social background and natural dierences on the attainment of advantage. In his pathbreaking work, John Roemer has, in recent years, attempted to overcome this impasse. He has advanced a precise denition of equality of opportunity and formulated an explicit rule for the selection of equalopportunity policies (Roemer, 1993, 1996, 1998). His proposal has been widely discussed, and is being applied to the analysis of distributive issues in schooling, health care, taxation and development aid (Roemer, 1999, Betts and Roemer, 2001, Llavador and Roemer, 2001, Roemer et al., forthcoming). In spite of these achievements, we believe Roemers proposal to be seriously awed. This paper will present our main points of criticism, propose an alternative denition of equal opportunity and construct a selection mechanism that allows for a partial ranking of opportunity policies. Before we proceed with our discussion, we propose the following abstract denition of equal opportunity. When we say that equality of opportunity with regard to a certain advantage should obtain for a group of people, we mean that certain factors should and other factors should not inuence their dierential attainment of advantage. Let us refer to the rst set of factors as peoples relevant characteristics and to the second set of factors as their irrelevant characteristics. Strict equality of opportunity obtains when dierences in peoples irrelevant characteristics do not re-

1 INTRODUCTION

sult in dierences in their attainment of advantage. To make this general concept concrete, we have to specify not only the advantage in question, but also which characteristics we regard as morally relevant and irrelevant. It is in these specications that disagreement among proponents of various forms of equal opportunity arises. Suppose, for example, that we are concerned with the advantage of lifetime income and we wish to compensate people for those dierences in advantage that result from their parents wealth. Suppose, furthermore, that we have a simple predictive model of expected lifetime earnings in which individuals are described by only three characteristics: years of schooling, low or high IQ, and poor or rich family background. Imagine we consider parental income as morally irrelevant, while we come to consider IQ and years of schooling as morally relevant in this context. Strict equality of opportunity then requires us to equalize the expected advantage of all individuals with identical relevant characteristics, regardless of their irrelevant features. In our example, this would mean the equalization of the expected attainment of advantage between poor and rich individuals with the same amount of schooling and the same intelligence. However, if we regarded not only parental income, but also IQ as morally irrelevant, we would reach a dierent conclusion. Strict equality of opportunity would then obtain when only individuals amount of schooling, but not their intelligence or their parental income, determines their attainment of advantage. Dierent specications of advantage and of relevant and irrelevant characteristics thus result in dierent normative conceptions of equality of opportunity and their specication involves an inescapable value judgement. Recently, several authors have proposed a particular choice of the morally relevant and irrelevant characteristics (Arneson, 1989, Cohen, 1989). According to this conception, the characteristics of moral relevance are pre-

1 INTRODUCTION

cisely those characteristics over which people have control. By contrast, peoples circumstances and other factors beyond their control (or circumstances for short) should not be a source of dierential levels of advantage. The motivating idea of this conception is that equality of opportunity demands that people should be equally able to achieve the same outcomes through their free choices, but that inequalities of outcomes are permissible when caused only by dierences in these choices. Proponents of this conception of equal opportunity must address two crucial questions. Firstly, how do we determine when individuals, faced with dierent circumstances, have made similar choices and therefore have a claim to be made equally wello? Secondly, which distributive mechanism can best compensate people for the eect of circumstances on their attainment of advantage? John Roemers work responds to both of these questions. In a nutshell, Roemers proposal is as follows. We are to select some representation of what we regard as peoples circumstances as well as some measure of peoples actual choices which Roemer calls eort. We then sort people with similar circumstances into types. Since the expenditure of actual eort may be inuenced by circumstances, Roemer takes individuals free choices to be represented not by their actual eort, but by their eort relative to other members of their type. For Roemer, strict equality of opportunity has been established when people in dierent types who expend the same degree of relative eort receive the same advantage. For practical purposes, he then proposes that society should choose a policy that maximizes the average advantage of those whose circumstances cause them to be the worsto at a given level of relative eort (where the average is taken over all degrees of relative eort). We shall draw attention to what we believe are serious aws in Roemers proposal. In Section 2, we take issue with Roemers representation of peoples relevant and irrelevant characteristics. We show that typing and

1 INTRODUCTION

the relative eort metric conate peoples relevant and irrelevant characteristics in the presence of statistical correlations among these characteristics. By contrast, the simple formulation of the equalopportunity criterion with which we started this paper suers from no such aw. Moreover, we note that Roemers measure of relative eort can be just as much a product of an individuals circumstances as absolute eort. Roemers construction therefore falls short of its own ambition to create an inter-personally comparable measure of individuals free choices. In Section 3, we take issue with Roemers rule for selecting an equal opportunity policy. We argue his rule burdens the concept of equal opportunity with utilitarian and desert-based distributive principles that are foreign to the idea of equal opportunity. In our view, a criterion of equal opportunity should be purely concerned with compensating people for the eects of their irrelevant characteristics, and should steer clear of any commitment to principles governing the outcomes that people achieve due to their relevant characteristics. We also note that his selection rule is inecient, in the sense that it violates strong Paretooptimality. In response to these problems, we advance a criterion of opportunity dominance which maintains this conceptual purity and is strongly Pareto optimal. This criterion selects a set of candidate policies that are undominated in opportunity. If the set contains more than one policy, further choices have to be made on the basis of additional, conceptually distinct, principles of distributive justice. We suggest that future research should explore the combined eect of familiar distributive principles, such as utilitarian or desertbased principles, and the criterion of opportunity dominance.

2 CHOICE AND CIRCUMSTANCE

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2.1

Choice and Circumstance

The relevance of circumstance

In Roemers view, attainment of equal opportunity requires a distributional mechanism that compensates people for the inuence of factors beyond their control, but allows dierential outcomes insofar as they result from dierences in peoples free choices. Equating morally relevant characteristics with the factors that are within a persons control, this conception aims to incorporate a particular ideal of responsibility for outcomes into egalitarian theory. According to this ideal, people should be held responsible for the outcomes of exactly those choices that were free and unaected by circumstances. Contemporary discussions of the notion of responsibility for outcomes cast doubt on the validity of this particular conception and emphasize that responsibility for outcomes does not have to be congruent with the notion of personal control (cf. Hart and Honor, 1959, Fleurbaey, 1995, Scanlon, 1998). In this paper, we take no e position on the matter of what are the proper grounds for the attribution of individual responsibility. Instead, we will aim for an analysis of equal opportunity that does not commit itself to any one particular conception of moral relevance. Such an analysis should enhance the clarity of the political debate by pinpointing dierent sources of disagreement and by disentangling dierent conceptual issues. We will attend to these desiderata in our own formulation of an equalopportunity principle. In sections 2.12.4, we shall discuss the merits of Roemers proposal on its own terms and accept the premise that people should be held responsible exactly for the factors that are within their control. Based on this premise, Roemer sets out to devise a method to determine what we can consider to be peoples free choices and also to determine

2 CHOICE AND CIRCUMSTANCE

when individuals faced with dierent circumstances have made similar choices. Roemer (1998, pp. 89) conceives of this distinction between choice and circumstance as involving two distinct questions. Firstly, what kinds of factors, such as family background and natural talents, are beyond a persons control? Secondly, given these factors and their inuence on peoples choices, what part of their behaviour can we attribute to their free choices? Roemer remains silent on the rst question, leaving it to be decided by society through some political process. Once society has decided what to regard as factors beyond a persons control, Roemer constructs a typing of the individuals concerned. For any list of uncontrollable factors, such as social class, parental income, race, natural talents, etc., we are to sort individuals into types according to the factors characterizing them, with individuals in the same uncontrollable circumstances falling into the same type. A type may thus consist of all individuals with suciently similar parental income or of all individuals with the same IQ. By construction, individuals within the same type are considered to be in the same circumstances and, thus, to have an equal ability to achieve advantage. Within each type, therefore, peoples dierential achievement is considered to be entirely due to the dierent choices they made. The challenge is, then, to isolate the eects of circumstances on the attainment of advantage for people in dierent types. These eects can be either direct or indirect. If, for example, income is the advantage in question, the children of wealthy parents typically have an increased income directly through parental gifts or bequests. But circumstances can also aect the attainment of advantage indirectly, via their inuence on the choices that people make. Peoples actual choices are dependent on their beliefs, preferences, the range of options open to them and on their deliberative process. All of these can be signicantly inuenced by factors

2 CHOICE AND CIRCUMSTANCE

beyond a persons control. Indirect inuences of this kind are notoriously dicult to address since they imply that peoples actual choices, due to their dependence on uncontrollable circumstances, are inappropriate grounds for assigning advantage. Roemer therefore proposes to go behind peoples actual choices, stripping them of the inuence of circumstance to reveal their real choices for which we can properly hold them responsible. Roemer asks us to choose some observable measure of peoples choices that is related to the advantage in question and which he calls eort. He then ranks all individuals within a type according to their actual expenditure of eort. This ranking then allows Roemer to partition people within each type into quantiles of eort relative to their type. A person i belongs to the quantile of relative eort exactly if a fraction of the entire population expends at most as much eort as i. For example, if a population is uniformly distributed between 0 and 2 hours of work, then the person who works for one hour will be at = 0.5 in the distribution of relative work. Roemer argues that this measure of typerelative eort reveals a persons real choices, unaected by circumstance. He thus uses the metric of relative eort to compare the choices of people belonging to dierent types and he considers people to have made the same choice exactly if they occupy the same position in the relative eort distribution of their respective types. In eect, Roemer takes the individuals places in the relative eort distribution of their types to be their only relevant characteristic and concludes that strict equality of opportunity obtains when all people who expend the same degree of relative eort are equal in advantage (Roemer, 1998, pp. 1516).

2 CHOICE AND CIRCUMSTANCE

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2.2

Typing misrepresents circumstance

In this section, we argue that Roemers method of typing leads to a conation of the characteristics for which we do and do not want to hold individuals responsible when both kinds of characteristics are statistically correlated with each other. Suppose, for example, that we are concerned with health insurance and that we wish to compensate people for their exposure to a persuasive and misleading advertising campaign for cigarettes. Our example assumes that the cigarette manufactures targeted a particular subgroup of the population and that exposure E and nonexposure E to this campaign was beyond the individuals control and is considered morally irrelevant. For simplicitys sake, we also assume that up to the start of the campaign, peoples decision to smoke was the result of an unimpeachable process of free choice. Suppose we regard it as morally relevant whether a person was a smoker S or nonsmoker S before the campaign. Following Roemers methodology, we would now sort people into two types, the set tE of people who were exposed to the campaign and the set tE of people who were not. On Roemers method, any dierence between the smoking behaviour of these two types would be attributed to the advertising campaign and, consequently, would occasion a redistribution of social endowments. Now, imagine that the cigarette manufacturers target their advertisements at the individuals who did not smoke before the campaign. We may assume that the campaign reaches a large proportion, but not all of these individuals. Similarly, we may assume that a small proportion of longterms smokers is, as a byproduct of the campaign, also exposed to these advertisements. Imagine further that, although the advertising campaign was eective and increased the proportion of smokers in the exposed type, people exposed to the campaign still tend to smoke less than members of the unexposed type of

2 CHOICE AND CIRCUMSTANCE longterm smokers.

11

In this example, Roemers method would treat the exposed type tE as if it were advantaged and the nonexposed type tE as if it were disadvantaged by circumstance. To see this, suppose we had one person from each type, each smoking an equal amount of cigarettes. Since the average cigarette consumption in the exposed type is lower than in the nonexposed type, the person from the exposed type would be considered to have tried less hard to resist smoking than the person from the nonexposed type. Translated into a concrete policy, this might mean that the person from the exposed type would have to pay more for the same package of health insurance. This is contrary to reason because, by assumption, both individuals had been unimpeachably free in their choices up to the start of the advertising campaign and we set out explicitly to compensate for dierences arising from exposure to the advertising campaign. What this example shows is that Roemers typing methodology cannot deal with correlation between factors for which we do and do not want to hold people responsible. As Maskin (1995) and Fleurbaey (1998) point out, Roemers methodology is therefore predicated upon the statistical independence of relevant and irrelevant characteristics. This diculty occurs only because Roemers formalism represents irrelevant characteristics, such as exposure to the advertising campaign, by the set of individuals who exhibit these characteristics. This method goes astray when there exists a statistical correlation between relevant and irrelevant characteristics. To avoid this problem, we must not represent irrelevant characteristics indirectly by the set of individuals who display these characteristics. Instead, once we are given the variables X1 , . . . , XL that are used to describe the individuals and to predict their expected outcome

2 CHOICE AND CIRCUMSTANCE

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relative to our econometric model, we must sort these variables into a vector Y = Y1 , . . . , Y M of morally relevant factors and a vector

Z = Z1 , . . . , ZN of morally irrelevant factors (where M + N = L and Ym = Zn for any 1 m M and 1 n N ). Suppose that u(, y, z) is the (expected) outcome under policy of an individual with a combination Y = y of relevant characteristics and a combination Z = z of irrelevant characteristics. Strict equality of opportunity would then be achieved by a policy which, for any combinations z and z of irrelevant characteristics, equalizes the functions u(, ., z) and u(, ., z ):

(1)

u(, y, z) = u(, y, z )

for any combination y of relevant characteristics and any combinations z and z of irrelevant characteristics. Our example used a simplistic econometric model in which individuals are described by only two characteristics, namely the irrelevant characteristic of exposure E or non exposure E and the relevant characteristic of voluntary smoking S or nonsmoking S in the past. Strict equality of opportunity requires a policy that, rstly, equalizes the outcome u(, S, E) and u(, S, E) of exposed and nonexposed past smokers and, secondly, equalizes the advantage u(, S, E) and u(, S, E) of exposed and nonexposed past nonsmokers. However, equal opportunity does not require us to equalize the outcome u(, S, E) and u(, S, E) of exposed past nonsmokers and nonexposed past smokers. It is exactly this unwarranted compensation of the dierences in the opportunity of exposed past nonsmokers and nonexposed past smokers that is implied by Roemers method of typing and that is easily avoided by our proposal.

2 CHOICE AND CIRCUMSTANCE

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2.3

Relative eort is also a product of circumstance

As we discussed above, Roemers reason for representing irrelevant characteristics by the set of individuals who display these characteristics is part of his method for comparing the choices of people in dierent circumstances. In our view, the problems of the typing methodology that we discussed above already discredit the measure of relative eort as the basis for assessing equality of opportunity. To return to the case of the advertising campaign, it would be a mistake to conclude that an exposed and an unexposed individual who both smoke to the same degree relative to their own type are entitled to the same outcome. If we accepted this conclusion, we would have to transfer resources away from the very people whom we intended to compensate for their exposure to the campaign. On a more fundamental level, we now argue that Roemers measure of relative eort will, in many cases, fail to solve the problem it was designed to address. As we saw, Roemer suggests that absolute eort is an unsuitable basis for assessing equality of opportunity because the distribution of eort is a characteristic of the type, and hence not something the person should be held accountable for (Roemer, 1998, p. 11). Roemers suggestion of moving to the metric of relative eort can only solve this problem if the distribution of relative eort is not also inuenced by factors beyond individuals control. However, the metric of relative eort will only be guaranteed to be independent of circumstances when, in each type, the cumulative distribution of the number of individuals depends continuously on the eort variable. Only in this case will the distribution of the population across levels of relative eort be the same in each type. Indeed, this distribution will then be described, for all types, by a 45 degree line through the origin in a graph with relative eort on the abscissa and the cumulative share of the population on the ordinate. In practice,

2 CHOICE AND CIRCUMSTANCE

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as Roemer (1996, p. 285) writes, the population will hardly ever be thus distributed because the eort variable will take a discrete form. The most specic data available may, for instance, allow us to measure the length of postmandatory schooling in years and perhaps months, but not in days, hours, or even minutes. This discrete nature of the available data then thwarts the closer approximation of some underlying, hypothetical continuous distribution. As a consequence, the distribution of relative eort is typically just as much a product of circumstances beyond peoples control as the distribution of absolute eort. Individuals base their choices to expend eort in part on the reward schedule for eort that is jointly determined by their circumstances and the policy they face. By implication, dierent circumstances and dierent policies therefore dierentially aect an individuals choice of eort. Under a policy that results in dierent reward schedules for individuals in dierent types, we therefore expect to see dierent distributions of absolute and relative eort for dierent types. Moreover, individuals typically dier in their response to the very same reward schedule due to dierent preferences for combinations of eort and reward. If these responses are distributed dierently across dierent types, we also expect to see dierent distributions of absolute and relative eort for dierent types, irrespective of the policy chosen. The distribution of relative eort therefore typically diers across types just as much as that of absolute eort. As an illustration, imagine a population from dierent ethnic backgrounds and a policymaker who is interested in establishing equal opportunity for expected lifetime income. Since an important choice factor contributing to peoples income is their amount of schooling, we may decide to use years of postmandatory education as a measure of eort and to sort people by types according to their ethnicity. Suppose that some

2 CHOICE AND CIRCUMSTANCE

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Figure 1: Distribution of absolute and relative eort type I exhibits a large range of dierent eort levels with its members equally distributed over the levels of 1, 2, 3 and 4 years of postmandatory education. We assume that types dier in their educational choice because of a culture that discourages higher education in type II. As a result, 75 percent of all members of type II pursue 1 year of additional education while only 25 percent of all members of type II pursue 2 years. Clearly, in this case, the distribution of absolute eort is a characteristic of the type to which individuals belong. The same holds true, however, for relative eort. To see this, consider the distribution of relative eort. According to Roemers denition, an individual i expends relative eort if and only if is the fraction of individuals of the type who expend a level of absolute eort of at most the amount expended by i. Figure 1 shows that both the distribution of absolute and the distribution of relative eort dier across type I and II. Note that this simple example does not make any reference to the advantage received by the individuals. For all we have said, a policy that equalizes opportunities between the two types may already be in place,

2 CHOICE AND CIRCUMSTANCE

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giving an equal lifetime income to the individuals in dierent types who are at the same position in the relative eort distribution of their type. (In this example, this would mean that individuals in type II with 1 year of higher education obtain the same lifetime income as individuals in type I with 3 years of higher education, and those individuals in type II who have 2 years of higher education obtain the same lifetime income as those in type I who have 4 years of higher education.) There is hence no reason to suppose that the policy that equalizes opportunities between these two groups will produce the same distribution of relative eort in each type. A typedependent variation of the distributions of both absolute and relative eort may occur regardless of individuals advantage functions and regardless of whether or not these advantage functions equalize opportunity. In sum, relative eort can be just as much a product of circumstance as absolute eort and the appeal to relative eort therefore fails to solve the problem that Roemer set out to resolve. Roemers construction therefore falls short of its own ambition to create an inter-personally comparable measure of individuals free choices.

2.4

Typing misrepresents relevance

For each type t, Roemer assumes the existence of a function ut = ut (, e) that yields the (expected) advantage of an individual of this type depending on some relevant characteristic e (the eort variable) and on policy . Since the individuals in a given type share some, but not all of their personal characteristics, we cannot expect that they all enjoy the same advantage at a given level of eort and under a given policy. Suppose, for example, that we are interested in equal opportunity for expected lifetime income among people from dierent social backgrounds. Suppose we choose years of postmandatory schooling as our eort variable.

2 CHOICE AND CIRCUMSTANCE

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We sort people into two types depending on whether they come from a rich or poor family background. Within each type, these people will dier in some additional characteristic, such as intensity of jobseeking activity, that inuences their expected lifetime income at a given level of schooling. Thus, the assumption that all individuals of a given type have the same function of advantage to eort will typically be false. Roemer addresses this problem by constructing the function ut as the average of the advantage functions of the individuals in type t (Roemer, 1996, p. 280, Llavador and Roemer, 2001, p. 159):

(2)

ut (, e) =

1 It

u(, e, zi )
it

where It is the number of individuals in type t, Y = e is a possible value of the predictive variable interpreted as eort, and Z = zi represents the characteristics of individual i other than the eort level e. In our example, this means that for any given choice of years of postmandatory schooling, the advantage function is constructed by averaging the advantage attained by individuals with diering levels of jobseeking activity. This construction leads to a misrepresentation of the inuence of irrelevant characteristics when the eort variable is correlated with other relevant characteristics in dierent ways in dierent types. The present problem is structurally similar to the one discussed in section 2.2. The dierence is that the present case does not involve correlations between relevant and irrelevant characteristics, but correlations within the set of relevant characteristics. The problem can thus arise even when relevant characteristics are not correlated with the characteristics used to dene the type, as was the case in section 2.2. This aw can be illustrated by the following example. Suppose we have ten persons, A through J, and the three characteristics of years of school-

2 CHOICE AND CIRCUMSTANCE

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ing, jobseeking activity, and parental income. Suppose that these characteristics determine a persons (expected) lifetime income under the status quo by the following formula: lifetime income equals 1 for short schooling + 2 for long schooling + 0 for low jobseeking activity + 8 for high jobseeking activity + 0 for low parental income + 1 for high parental income. Society decides that parental income is an irrelevant characteristic and that years of schooling is the pertinent eort variable. The example is illustrated numerically in the following table.

Individuals A B C D E F G H I J

schooling short (1) short (1) long (2) long (2) short (1) short (1) short (1) long (2) long (2) long (2)

jobseeking activity low (0) high (8) low (0) high (8) low (0) low (0) high (8) low (0) high (8) high (8)

parental income poor (0) poor (0) poor (0) poor (0) rich (1) rich (1) rich (1) rich (1) rich (1) rich (1)

advantage 1 9 2 10 2 2 10 3 11 11

Under Roemers approach, we would type according to parental income, with AD falling into the poor type, and EJ falling into the rich type. To assess this status quo, we then construct an advantage function for each type by averaging the advantage received at every eort level. For type poor, this means that at eort level 1, advantage is 5, and at eort level 2 advantage is 6. For type rich, the numbers are 4.7 and 8.3 respectively. We then take the relative eort levels in each type and compare the advantage obtained in each type in order to judge which individuals are disadvantaged. The result is given in the following table.

2 CHOICE AND CIRCUMSTANCE

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Type poor

relative eort low (A&B) high (C&D)

advantage a la Roemer 5 6 4.7 8.3

Roemers verdict advantaged disadvantaged disadvantaged advantaged

rich

low (E&F &G) high (H& I &J)

We can see that because the two relevant characteristics of relative eort and jobseeking activity are correlated dierently in the dierent types, Roemers method of determining the advantage function of a type yields the wrong verdict on which individuals are advantaged and which individuals are disadvantaged. For two individuals with the same level of jobseeking activity and the same amount of schooling, the advantage of the individual from a rich family is, by the assumptions of our example, one unit higher than the advantage of the individual from a poor family. Hence, individuals from rich families are advantaged in the status quo, regardless of their level of jobseeking activity or years of schooling. Instead, Roemers method concludes that loweort rich individuals are at a disadvantaged vis`vis loweort poor individuals. In addition, a it overestimates the degree to which high-eort rich individuals are advantaged vis`vis high-eort poor individuals. a This example has been constructed in a such way that Roemers method does not cause the problems that we discussed in section 2.2. For in this example the relevant characteristics are not correlated with the irrelevant characteristics used in typing. Moreover, the assumption that we represent peoples choices by their relative eort is not essential in this example. If, as a consequence of our earlier arguments, we replace relative by absolute eort, the example goes through unchanged. Our observations in this example once more return us to the general diculties resulting from Roemers representation of irrelevant charac-

2 CHOICE AND CIRCUMSTANCE

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teristic by the set, or type, of individuals exhibiting these characteristics. Our earlier method for solving the problem of correlation between irrelevant and relevant characteristics avoids the current diculties. Since the notion of typing plays no role in our proposal, we do not require the construction of an aggregated advantage function for a type. Once predictive variables have been sorted into relevant and irrelevant, strict equality of opportunity simply demands that we equalize the advantage of all individuals with the same relevant characteristics. This would correctly occasion a redistribution of advantage from individuals with a rich family background to those from a poor family background. The dierent ways in which this redistribution could take place is the subject of the following sections, where we will return to this example. A defender of Roemers method could try to protest that we have not chosen the eort variable appropriately if we consider not only years of schooling, but also jobseeking activity to be a morally relevant characteristic. This defender might argue that the eort variable must reect some overall measure of eort, consisting perhaps of all possible combinations of morally relevant characteristics. In our case, the eort variable would then consist of combinations of years of schooling and levels of jobseeking activity. This defense presents a new problem for Roemers approach, since his method of calculating relative eort relies on some ranking of eort levels in the direction of increasing eort. It is not clear how such a ranking should be constructed for a multidimensional eort variable that is composed of several relevant characteristics. Does a combination three years of schooling and high jobseeking activity represent a greater eort than four years of schooling and low jobseeking activity? In this most recent work, Roemer addresses this issue of creating an index of overall eort out of a possible multiplicity of relevant factors, by developing what we might call a revealed eort theory (Roemer,

2 CHOICE AND CIRCUMSTANCE

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2001, 2002, Roemer et al., forthcoming). Roemer takes overall eort to be revealed by an individuals rank in the outcome distribution of his type. He denes overall eort as the residual determinant of outcomes once we keep type and policy xed. To construct this eort variable, he assumes that it eects a monotonic increase in the individuals measure of outcomes. If we take two individuals from the same type, the rst of whom has a higher outcome than the second, then Roemers revealed eort theory attributes a higher degree of absolute eort to the rst than to the second individual. Constructing the metric of relative eort as before, an individual who ranks at the median of the outcome distribution in his type is thus attributed an overall relative eort of 0.5. This approach abandons a central insight in Roemers earlier writings that were concerned with the functional dependence of outcomes on eort and, thus, with the options feasible for the individuals. On this account, a normative criterion should assess the opportunity of an individual to realize a shift in his outcome measure, if he were to choose a dierent eort level. By contrast, revealed eort theory considers only which advantage the individuals actually realize under a given policy, but not how this advantage would change if the individuals were to choose dierently. In Roemers latest proposal, any talk of such a functional relationship or of the opportunity to inuence advantage through dierent choices becomes superuous and eliminable. The idea of equal opportunity then collapses back into a particular, new outcome criterion via the intermediate, but eliminable construction of the revealed eort variable. Indeed, the revealed eort variable does not correspond to any of the predictive variables X = X1 , . . . , XL of our econometric model. In revealed eort theory, the only role for this model is to procure a measure for individual is actual advantage wi () := u(, xi ) under policy (where X = xi is the vector of individual is personal characteristics used in the econometric

3 SELECTING AN EQUALOPPORTUNITY POLICY model).

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3
3.1

Selecting an EqualOpportunity Policy

Utilitarianism for the disadvantaged?

We now turn to Roemers method for selecting an equalopportunity policy. It is important to note at the outset that strict equality of opportunity leaves open one important issue that must eventually be resolved if we wish to select a concrete policy. All that equality of opportunity demands is that individuals who share the same relevant characteristics should also receive the same outcome. It does not imply how much an equalopportunity policy should spend on individuals with dierent relevant characteristics. Suppose in our previous example that we can carry out a redistribution without any loss of resources through lumpsum transfers among individuals with dierent parental income and/or eort levels. Suppose furthermore that such redistribution occasions no change in the individuals behaviour. We could then achieve strict equality of opportunity by taxing each rich individual by 0.4 units of lifetime income and giving 0.6 units to each poor individual. However, we could also achieve strict equality of opportunity by only taxing the shortschooling rich by 1 unit. This would trivially equalize the advantage of poor and rich individuals with short schooling and we could then spend the as yet unused 3 units of advantage to equalize opportunity between poor and rich individuals with long schooling. There may thus exist many dierent ways to establish strict equality of opportunity. Any method for choosing an equalopportunity policy must therefore answer the question of how much of our budget we should spend on individuals with dierent relevant characteristics. In this section, we will discuss how this budget

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problem arises in the context of Roemers maximin approach and we will look at Roemers proposed solution to this problem. We will argue that criteria for solving the budget problem ought to be kept separate from a criterion of equal opportunity. We would otherwise blur the line between the principle of equal opportunity and other, conceptually distinct distributional criteria, such as utilitarianism or some notion of how dierent relevant characteristics should be rewarded. For each type t, Roemer assumes the existence of a function ut = ut (, e) that yields the (expected) advantage of an individual of this type depending on eort e and policy . Given the distribution of absolute eort levels within a type, we can now determine an individuals relative level of eort within this type. Roemer then calculates the function vt (, ) that species the advantage of type t for the relative eort under policy . For the sake of the argument, we will accept this construction in terms of relative eort in spite of our arguments in the previous section. Whatever we say in the present section applies unaltered if we replace relative eort by absolute eort or, indeed, by any other characteristic of individuals that we might deem to be relevant. Suppose that we have sorted the population of individuals into centiles of eort within their type. Strict equality of opportunity would now require the choice of a policy within the budget such that

(3)

vt (, ) = vt (, )

for all = .01, . . . , .99, 1.

Roemer approaches the problem of policy selection from the viewpoint of optimization theory. The idea of optimization is to dene a relation of betterness and then to pick a policy that is best according to this relation. From this viewpoint, Roemer (2001, p. 12) rehearses two problems with strict equalization. Firstly, there may not exist any feasible policy

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that achieves strict equalization. Secondly, strict equalization may lead to Pareto inferior allocations. For these reasons (to which we will return below), Roemer replaces the requirement of equalization by the demand that we maximize the advantage of the type that is worst-o vis`vis a other types at the same relative eort level, i.e. that we choose a policy that maximizes

(4)

min vt (, )
t

for all = .01, . . . , .99, 1.

Roemer correctly points out that this is not a welldened optimization problem unless we are given a budget constraint for each level of relative eort. Such a constraint must tell us how much of our budget we should spend on highly motivated individuals who expend a high amount of relative eort and how much we should spend on less motivated individuals who expend a lower amount of relative eort. Roemers solution to the budget problem gives each of the 100 centiles equal weight in determining the overall policy. Thus, his equalopportunity policy for the case of centiles is the policy that maximizes

(5)
{.01,...,.99,1}

min vt (, )
t

Roemers criterion oers a mixture of maximin and utilitarian reasoning by requiring us to maximize the average, taken over all centiles of relative eort, of the advantage enjoyed by the least wello type at that centile. The maximin element in Roemers criterion determines the advantage of the least wello type at any level of relative eort. Note that dierent types may be least wello at dierent centiles of relative eort. In the example from section 2.4, for instance, Roemers methodology considered

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the rich type to be at a disadvantage for the rst fty centiles of relative eort, while the poor type was considered to be at a disadvantage for the second fty centiles. The utilitarian element in Roemers criterion then trades o the least advantage achieved at low levels of relative eort against the least advantage achieved at high levels of relative eort. It will therefore mandate a worsening of the situation for disadvantaged individuals with low levels of relative eort in exchange for an improvement in the situation of disadvantaged individuals at high levels of relative eort, if this increases the average least advantage across dierent centiles. In this balancing, it is an interesting question whether the minimum advantage at a given centile should be weighted by the number of individuals at this centile or, perhaps, by the number of the individuals in the worsto type at that centile. An additional constraint advocated by Roemer (1993, p. 160, 1998, p. 104n26) is based on a notion of desert and requires that individuals who expend a higher degree of relative eort should also attain a higher level of advantage. Needless to say, there are many more alternatives to this particular solution of the budget problem. Other criteria that appear equally defensible could recommend spending an equal portion of the overall budget on the worsto type at each combination of relevant characteristics (equal split between characteristics), spending a portion of the overall budget on the worsto type at each combination of relevant characteristics y that corresponds to the number of individuals with the combination y (a form of equal split weighted by the amount of individuals), or allocating the budget so as to maximize the advantage of the worsto type at the worst combination of relevant characteristics (a form of maximinism). It should be clear that any of these criteria are conceptually distinct from the notion of equal opportunity. These criteria pertain to the advantage that individuals ought to receive on the basis of

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their morally relevant characteristics, while the notion of equal opportunity is concerned with the compensation of individuals for disadvantages that arise from their irrelevant characteristics. We would therefore like to see a formulation of a selection criterion that clearly sets such criteria apart from the concern for equal opportunity. We take up the task of formulating such a criterion in section 3.3, after addressing a nal criticism of Roemers approach in the following paragraphs.

3.2

Equality, Maximin and Leximin

Before we turn to a new formulation of the equalopportunity criterion, we note a weakness in Roemers argument. Recall that Roemer abandoned strict equality (3) in favour of maximin (4) partly for reasons of Paretooptimality. The literature distinguishes several forms of Pareto optimality. Weak Paretooptimality, on the one hand, requires that, if we can make everyone strictly better o, then we should do so. Strong Paretooptimality, on the other hand, requires that, if we can make at least one individual strictly better o without making anyone worse o, then we should do so. While maximin satises weak Paretooptimality, it violates strong Paretooptimality. Consider a simple example in which, under a policy , black men and women enjoy an equal advantage that is lower than that of either white women or white men. Suppose that maximizes the advantage of the least wello types, namely black men and black women. For simplicity, we may assume that this ordering holds for any level of relative eort. This policy may still be Pareto suboptimal if it is possible to nd a policy that increases the advantage of white women without decreasing the advantage of black men and women. The leximin rule oers the perhaps best known solution to this limitation of maximin (Sen, 1970). Adapted to our context, the leximin rule condi-

3 SELECTING AN EQUALOPPORTUNITY POLICY tional on level = .01, . . . , .99, 1 of relative eort reads: (6)

27

Maximize the advantage of the worsto type at relative eort . In case of a tie, maximize the advantage of the second worsto type at relative eort . Proceed analogously for all types.

Leximinism not only provides a choice rule for an optimal policy, but it also allows us to compare dierent policies relative to each other. According to leximin, a policy is at least as good as a policy conditional on a level of relative eort exactly when the advantage of the worsto type under policy at relative eort is at least as great as the advantage of the worsto type under at and, in case of a tie, the advantage of the second worsto type under at is at least as great as the advantage of the second worsto type under at etc. Note that this denition is relative to the parameter and the budget question reviewed in the previous section is how we should treat this loose parameter in the suggested optimization problem. At this point, a diculty arises in Roemers proposal. On the one hand, the argument based on strong Paretooptimality and the absolute priority of worseo individuals vis`vis bettero individuals supports the a leximin rule rather than the maximin rule. On the other hand, Roemers treatment of the loose parameter applies only to maximin and cannot possibly apply to leximin. When Roemer addresses the loose parameter in the case of maximin, he suggests as a solution that we sum the values of the expression mint vt (, ) over all possible levels = .01, . . . , .99, 1. This treatment presupposes that the expressions over which the sum is taken yield a number, for otherwise the operation of summing is not dened. The minimum operator, of course, always yields a number; leximin, however, never yields a number. Leximin generates only an ordering of policies, but not a numerical measure of the amount by which one policy

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is better than another policy. Hence, the suggested treatment of the free parameter does carry over from maximin to the case of leximin.

3.3

Opportunity dominance

Although there are disputes about the characteristics for which individuals deserve compensation, some form of equal opportunity is one of the few social goals that nd common support in the current political discussion from opposing political ideologies. Political arguments therefore frequently appeal to equal opportunity as a principle that is thought to mitigate disagreements about how to compensate individuals for dierences in outcomes. In this political context, it is important to keep our equalopportunity criterion free from controversial assumptions about reward and compensation for outcomes. Only if this neutrality is preserved can we explore by how much the satisfaction of some equalopportunity constraint arbitrates the import of controversial compensatory principles, such as outcomeutilitarianism and outcomeleximinism. Generally speaking, our task is therefore to dene a criterion that evaluates policies depending on how they compensate individuals for their irrelevant characteristics and yet remains neutral on the question of how we should distribute reward to individuals with dierent combinations of relevant characteristics. With this purpose in mind, we recast the idea of the previous paragraphs in our preferred framework. Suppose we have a predictive model with variables X1 , . . . , XL for the (expected) advantage u(, x1 , . . . , xL ) that results from dierent combinations of individual characteristics Xl = xl (1 l L) under policy . Suppose, furthermore, that society has sorted the predictive variables X1 , . . . , XL into a vector Y = Y1 , . . . , YM of morally relevant variables and a vector Z = Z1 , . . . , ZN of morally ir-

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relevant variables (where M + N = L and Ym = Zn for any 1 m M and 1 n N ). We could now apply the narrow criterion (1) of strict equality of opportunity that we formulated in section 2.2. For the purpose of policy selection, Roemer already raised two of the most common objections against this strict requirement. He pointed out that, on the one hand, there may not exist any policy that achieves strict equalization, while, on the other hand, equalizing policies may not be Pareto optimal. Although Paretooptimality is itself not an intrinsic part of the concept of equality (Sugden, 1984, Cohen, 2001), it seems to be almost universally regarded as a desirable property of rules for policy selection. We will therefore use the leximin principle from the previous section to dene when one policy compensates for irrelevant characteristics better than another policy, conditional on some combination of relevant characteristics. In a second step, we will then construct a partial ranking of possible policies on the basis of these conditional comparisons. A policy is at least as good as a policy conditional on relevant characteristics Y = y exactly when leads to at least as great an advantage as for individuals with the relevant characteristics y and the worst possible irrelevant characteristics Z = z and, in case of a tie, leads to at least as great an advantage as for individuals with relevant characteristics y and the secondworst irrelevant characteristics Z = z etc. A policy is better than a policy conditional on relevant characteristics Y = y exactly when is at least as good as conditional on y and, moreover, for individuals with the relevant characteristics y and some irrelevant characteristics Z = z , leads to a greater advantage than . We noted above that it is not clear how these conditional orderings could be synthesized into an overall, unconditional ordering. The desire for such a synthesized ordering resulted from Roemers optimization approach that seeks to dene a relation of unconditional betterness and

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then to pick a policy that is best according to this relation. Abandoning this idea, we merely synthesize a partial ranking of the available policies. We will therefore not be able to use this ranking to pick some best policy, but only to deselect dominated policies. To make such partial comparisons, we consider whether or not a policy is better than another conditional on any combination of relevant characteristics. We say that a policy dominates in opportunity a policy if and only if, for every combination of relevant characteristics Y = y, is at least as good as conditional on y and, for some combination of relevant characteristics Y = y , is better than conditional on y . The allocations between which this criterion remains undecided are precisely those for which a budget decision has to be made. Suppose that and are both undominated in opportunity. In particular, and must then not dominate each other in opportunity. On the one hand, there must hence be some of characteristics y such that leads to a greater advantage than for the worst irrelevant characteristics z (or, in case of a tie, the secondworst irrelevant characteristics etc.). On the other hand, there must also be some relevant characteristics y such that leads to a greater advantage than for the worst irrelevant characteristics z (or, in case of a tie, the secondworst irrelevant characteristics etc.). We now need to decide whether to weigh the concerns of individuals with relevant characteristics y higher than those with relevant characteristics y and to choose rather than . This is exactly the budget problem from above. To apply the notion of opportunity dominance, we start from the set of feasible policies. The feasibility of a policy will be determined by the overall available budget, the implementability of the policy and similar practical considerations. In a second step, we eliminate all policies from this set that are dominated in opportunity. The remaining policies are then considered as the nal candidates for an opportunity policy, requir-

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ing a budgetary choice to be made. We note that the set of policies that are undominated in opportunity is never empty (for any nite set of feasible policies). Moreover, the set of candidate policies is Pareto optimal in the sense that for any of the candidate policies there is no other feasible policy that could make some combination of characteristics better o without making any other combination of characteristics worse o. We apply this idea to the example of section 2.4 where lifetime income under the status quo was determined by the following formula: lifetime income equals 1 for short schooling + 2 for long schooling + 0 for low jobseeking activity + 8 for high jobseeking activity + 0 for low parental income + 1 for high parental income. Suppose society again regards parental income is an irrelevant characteristic and years of schooling and jobseeking activity as relevant characteristics. Suppose rst that our feasible policy instruments allow us without any costs to redistribute lifetime income depending on irrelevant characteristics. We may thus allocate a lump sum transfer to individuals from a poor family background. Any such lump sum that is given to the four poor individuals must be paid for by the six rich individuals. The opportunitydominance criterion then eliminates all but one policy that is undominated in opportunity. An easy calculation shows that this policy gives a lump sum transfer of 0.6 units of income to individuals with low parental income. Hence, each individual with high parental income is required to pay 0.4 units of income and thus keeps 1 0.4 = 0.6 units of income. In general, the set of policies that are undominated in opportunity may contain more than one element and we thus may again encounter the budget problem. Suppose, in the previous example, that the set of feasible policies allows us without any costs and without any behavioural eect to redistribute lifetime income depending not only on parental income, but also on years of schooling. Going to extremes, we may then

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decide to collect the one additional unit of advantage from all three rich individuals with short schooling. This would equalize the advantage of poor and rich individuals with short schooling. We could then draw on these additional three units when equalizing the opportunity between poor and rich individuals with long schooling. Our rst undominated policy would then allocate a lump sum transfer of 1.2 units of advantage to poor individuals with long schooling. This leaves an additional 0.2 units of transferrable advantage for rich individuals with long schooling. We could also go to the opposite extreme and collect the one additional unit of advantage from all three rich individuals with long schooling. This would now equalize the advantage of poor and rich individuals with long schooling. Our second undominated policy would then give 1.2 units of advantage to poor individuals with short schooling. This again leaves an additional 0.2 units of transferable advantage for rich individuals with short schooling. Given this primary constraint of opportunity dominance, we may now vary the distributive principle or principles we use to select a particular undominated policy. In addition to principles that determine how we weigh the interests of individuals with dierent relevant characteristics, we can also explore the eects of constraints on the pattern of reward to relevant characteristics. If we consider our last example, it might seem reasonable to require that longer schooling should be rewarded by higher expected lifetime income, thus excluding the second of the above policies. Nonetheless, we would still have to decide by how much lifetime income should increase with longer schooling. By varying our distributive principles, we will be able to judge the magnitude of the disagreement about the resulting pattern of outcomes that remains after the primary constraint of opportunity dominance has been satised. An illuminating analysis of this sort is performed by Groot and Van der Veen (forthcoming).

4 CONCLUSION

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Conclusion

We conclude with a summary of our constructive suggestions. In sections 1 and 2, we argued that every concrete application of the idea of equal opportunity involves an inescapable value judgement about which characteristics we consider relevant and irrelevant. We suggested that the distinction between factors within and factors beyond a persons control may act as a guide in the determination of moral relevance, but that we must not expect the notions of relevance and of personal control to coincide. Depending on the application and the advantage in question, relevant characteristics may involve peoples natural or developed talents, peoples actual choices, or some notion which might approximate Roemers idea of relative eort. Any concrete application of the idea of equal opportunity therefore starts from a value judgement that classies the characteristics by which we describe the individuals and predict their expected advantage. Individuals may then be held responsible for what are considered relevant characteristics, but not for characteristics that are considered morally irrelevant. In section 3, we argued that a criterion of equal opportunity should steer clear of any controversial assumptions about how individuals should be rewarded for dierences in outcomes due to their relevant characteristics. Any such commitment would further compromise the ability of a concrete principle of equal opportunity to muster support from a wide spectrum of political ideologies. We have therefore proposed a formulation that keeps the opportunity criterion conceptually distinct from principles governing the reward for relevant characteristics. In this formulation, we are able to vary the supplementary criterion and gauge the magnitude of the disagreements that remain in the presence of an opportunity criterion. This strategy enables the political debate to be conducted on two distinct

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issues. Firstly, which factors should be considered irrelevant for certain social advantages? Secondly, on what basis do we choose from the set of feasible policies that are not dominated in opportunity? We hope that this improved focus can help to settle political disagreements surrounding the implementation of opportunity policies.

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[9] H.G. Llavador and J.E. Roemer. An equal-opportunity approach to the allocation of international aid. Journal of Development Economics, 64(1):147171, 2001. [10] E. Maskin. Correlation and constraint. Boston Review, 20:1112, 1995. [11] J. Roemer. A pragmatic theory of responsibility for the egalitarian planner. Philosophy and Public Aairs, 22:146166, 1993. [12] J. Roemer. Theories of Distributive Justice. Harvard University Press, Cambridge (Mass.), 1996. [13] J. Roemer. Equality of Opportunity. Harvard University Press, Cambridge (Mass.), 1998. [14] J. Roemer. Equity in health care delivery and nance. Yale, unpublished, 1999. [15] J. Roemer. Defending equality of opportunity. Yale, unpublished, 2001. [16] J. Roemer. Equality of opportunity: A progress report. Social Choice and Welfare, 19:455471, 2002. [17] J. Roemer et al. To what extent do scal regimes equalize opportunities for income acqusition among citizens? Journal of Public Economics, forthcoming. [18] T.M. Scanlon. What We Owe to Each Other. Harvard University, Cambridge (Mass.), 1998. [19] A. Sen. Collective Choice and Social Welfare. HoldenDay, San Fransisco, 1970.

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[20] R. Sugden. Is fairness good? A critique of Varians theory of fairness. Nos, 18:505511, 1984. u