Kourtellos, Α., "Equality of Opportunity, the Great Gatsby Curve, and Polarization"

Thursday, November 30, 2023

Title: "Equality of Opportunity, the Great Gatsby Curve, and Polarization"

Speaker: Professor Andros Kourtellos, University of Cyprus

Host: Assistant Professor Alexopoulos Angelos, Department of Economics, Athens University of Economics and Business

Time: 15.30 -17.00

Room: A36

Abstact: We formally relate a central ideal of distributive justice, equality of opportunity (EOp), to inequality, economic mobility, and political polarization. We extend a standard family investment model with a public good (schooling) and majority voting over the provision of the public good to provide structural justifications for (i) the canonical EOp regression that underlies popular ex-ante approaches to the measurement of EOp, (ii) a link between EOp measures with measures of economic mobility derived from the canonical Solon IGE regression and income inequality (i.e., the "Great Gatsby Curve"), and, (iii) the impact of EOp on the redistribution preferences of the median voter. We investigate the implications of the model using data from European countries. We argue that substantive normative disagreement in the literature regarding which factors constitute circumstances implies substantial model uncertainty in empirical specifications and address this using model averaging methods. We find that reductions in EOp are associated with higher inequality, lower economic mobility, lower public expenditures on education (as a percentage of GDP), reduced confidence in public institutions, and lower social cohesion.