Compensation, reward, and the measurement of unfair inequalities

Abstract

Purpose – In this chapter we discuss to what extent some of the measures of inequality of opportunity (IOp hereafter) proposed in the literature meet the reward and the compensation principles. Methodology – We study the direct unfairness and fairness gap measures proposed by Fleurbaey and Schokkaert (2009) and the ex ante and the ex post measures proposed by Checchi and Peragine (2010). As all the measures violate at least one of the principles, we propose a framework in order to quantify, for each solution, the violations of the property that it does not fully satisfy and we formulate the problem of choosing the measure that minimizes the violations of the principle not fully satisfied. Findings – This procedure is shown to be able to rationalize some of the existing measures of opportunity inequality and to obtain new measures of IOp.