On the Design of Equal-Opportunity Policies

We study in this paper mechanisms to construct equal-opportunity policies for resource allocation. In a model where individuals enjoy welfare as a function of the effort they expend, and the amount of a socially provided resource they consume, the aim is to allocate the social resource so that the inequality of welfare across individuals at the same relative effort level is minimized. In doing so, and as opposed to other existing mechanisms for the design of equal-opportunity policies, we account for the hypothetical relative deprivation among equally-deserving individuals. Besides studying these mechanisms generically, we analyze their performance in the context of the delivery of health care resources