Inequality of Opportunity and Income Redistribution

TL;DR

This paper investigates how inequality of opportunity influences income redistribution preferences, revealing that people are less willing to redistribute when luck is less transparent, which affects perceptions of meritocracy.

Contribution

It introduces a novel experimental approach comparing direct luck and opportunity-based luck, highlighting how uncertainty affects redistribution preferences and perceptions of merit.

Findings

Spectators redistribute less under opportunity-based luck.

Less sensitivity to luck differences when opportunities are involved.

Inferential challenges reduce perceived meritocracy.

Abstract

Opportunities, such as access to education or family background, shape income inequality by influencing the chances of economic success. Unequal opportunities create uncertainty about whether success is merit- or luck-based. We examine how uncertainty impacts preferences for redistribution, comparing it to more transparent forms of luck. Using a U.S.-representative sample, we elicit redistribution decisions in two environments: when workers' earnings are influenced by luck directly ("lucky outcomes") or indirectly ("lucky opportunities"). Spectators redistribute less and are less sensitive to differences in luck under opportunities. Inferential challenges drive this gap, which implies that individuals are less meritocratic than previous findings suggest.