Abstract

In this paper, we develop a new measure of unfair inequality that integrates two commonly accepted principles of fairness: equality of opportunity and freedom from poverty, with a relatively new third principle of freedom from extreme richness, which takes its cue from limitarianist ethics. This can be done by introducing a base framework with an exogenously defined poverty line and richness line. This will be improved by allowing for different richness lines: relative and endogenous, as in Medeiros (2006). The two lines, combined with the proportional reward and compensation principles typically implemented in the Iop framework, allow for the construction of a norm-based distribution. Hence it will be possible to compute what we call unfair inequality by measuring the divergence between the empirical and the normative distributions. Then we aim to conduct an empirical application to analyze the development of inequality (unfair) from a normative perspective and to compare it among European countries.

This seminar is part of the (LIS)2ER Initiative.