My research interests lie at the intersection of public, labor and normative economics. Under the overarching theme of equality of opportunity my research agenda is driven by two main objectives.
First, I aim to strengthen the methodological toolkit that is used to quantify the extent of inequality of opportunity in current societies. Thereby, my work connects to the literature branches on intergenerational mobility and inequality measurement.
Second, I aim to contribute to our understanding of which circumstantial life factors cause the unequal distribution of life chances. Thereby, my work connects to the literature branches on early childhood development, and skill formation.
The Parental Wage Gap and the Development of Socio-emotional Skills in Children
Job Market Paper
Converging labor market opportunities between men and women have changed the economic incentives for how families invest monetary and time resources into their children. In this paper I study the causal impact of changes in the parental wage gap, defined as the wage difference between mothers and fathers, on the socio-emotional development of children. Drawing on administrative and survey data from Germany I construct potential wages for mothers and fathers through a shift-share design. I investigate family responses to changes in these potential wages and the ensuing effects on children's socio-emotional skills by a within-family sibling comparison. I find that decreases in the parental wage gap lead to i) an increase in household's total financial resources, ii) an increase in financial resources controlled by mothers, and iii) an increase in the use of informal care providers. However, in combination these intra-family changes have no aggregate effect on the socio-emotional development of children. These null effects are precise enough to exclude various effect sizes from other quasi-experimental interventions studied in the existing literature. My findings suggest that another 40% of the remaining parental wage gap in Germany could be eliminated without expecting strong consequences for the socio-emotional skill development of children.
Measuring Unfair Inequality: Reconciling Equality of Opportunity and Freedom from Poverty
With Ravi Kanbur and Andreas Peichl
Revision Requested by Review of Economic Studies (2nd Round)
Empirical evidence on distributional preferences shows that people do not judge inequality as problematic per se but that they take into account the fairness or unfairness of the outcome. This paper conceptualizes a view of unfair inequality and introduces a new measure of inequality based on two widely-held fairness principles: equality of opportunity and freedom from poverty. It develops a method for decomposing inequality and its trends into an unfair and a fair component. We provide two empirical applications of our measure. First, we analyze the development of inequality in the US from 1969 to 2014 from a fairness perspective. Second, we conduct a corresponding international comparison between the US and 31 European countries in 2010. Our results document that unfair inequality matches the well-documented inequality growth in the US since 1980. This trend is driven by decreases in social mobility, i.e. increasing importance of parental education and occupation for the income of their children. Among the 32 countries of our international comparison, the “land of opportunity” ranks among the most unfair societies in 2010.
The Roots of Inequality: Estimating Inequality of Opportunity from Regression Trees
With Paolo Brunori and Daniel Gerszon Mahler
Revision Requested by Scandinavian Journal of Economics
In this paper we propose the use of machine learning methods to estimate inequality of opportunity. We illustrate how our proposed methods - conditional inference regression trees and forests - represent a substantial improvement over existing estimation approaches. First, they reduce the risk of ad-hoc model selection. Second, they establish estimation models by trading off upward and downward bias in inequality of opportunity estimations. Finally, regression trees can be graphically represented; their structure is immediate to read and easy to understand. This makes the measurement of inequality of opportunity more easily comprehensible to a large audience. The advantages of regreession trees and forests are illustrated by an empirical application for a cross-section of 31 European countries. We show that arbitrary model selection may lead researchers to overestimate (underestimate) inequality of opportunity by up to 300% (40%) in comparison to our preferred method. This illustrates the practical importance of leveraging machine learning algorithms to avoid misleading recommendations with respect to the need for opportunity equalizing policy interventions in different societies.
Lower and Upper Bound Estimates of Inequality of Opportunity for Emerging Economies
With Andreas Peichl and Daniel Weishaar
Revision Requested by Social Choice and Welfare
Equality of opportunity is an important normative ideal of distributive justice. In spite of its wide acceptance and economic relevance, standard estimation approaches suffer from data limitations that can lead to both downward and upward biased estimates of inequality of opportunity. These shortcomings may be particularly pronounced for emerging economies in which comprehensive household survey data of sufficient sample size is often unavailable. In this paper, we assess the extent of upward and downward bias in inequality of opportunity estimates for a set of twelve emerging economies. Our findings suggest strongly downward biased estimates of inequality of opportunity in these countries. To the contrary, there is little scope for upward bias. By bounding inequality of opportunity from above, we address recent critiques that worry about the prevalence of downward biased estimates and the ensuing possibility to downplay the normative significance of inequality.
Work in Progress
Genetic Endowments, Educational Outcomes and the Mediating Influence of School Investments
With Benjamin Arold and Marc Stöckli
Draft in Preparation
School Spending and Equality of Opportunity in Education: Evidence from School Finance Reforms (Working Title)
With Eric Hanushek, Marc Piopiunik and Marc Stöckli
Draft in Preparation
Measuring Unfair Inequality: A Pragmatic Approach (Working Title)
With Ingvild Almas and Daniel Weishaar
Data Collection in Preparation
What Do People Believe That Others (Should) Earn? Multifactorial Survey Experiments on Beliefs About Actual and Fair Earnings (Working Title)
With Katrin Auspurg, Andreas Peichl, Laila Schmitt and Marc Stöckli
Data Collection Concluded
Subjective Health Perceptions and Economic Preferences (Working Title)
With Philipp Dörrenberg, Fabian Kosse, Lars Schwettmann and Uwe Sunde
Data Collection in Preparation
Beyond Equal Rights: Equality of Opportunity in Political Participation
With Andreas Peichl
Review of Income and Wealth, 2020, 66 (3), pp. 477-511
While it is well documented that political participation is stratified by socio-economic characteristics, it is an open question how this finding bears on the evaluation of the democratic process with respect to its fairness. In this paper we draw on the analytical tools developed in the equality of opportunity literature to answer this question. We investigate to what extent differential political participation is determined by factors that lie beyond individual control (circumstances) rather than being the result of individual effort. Using rich panel data from the US, we indeed find a lack of political opportunity for the most disadvantaged circumstance types. Opportunity shortages tend to complement each other across different forms of participation and persist over time. Family characteristics and psychological conditions during childhood emanate as the strongest determinants of political opportunities.
Inequality of Income Acquisition: The Role of Childhood Circumstances
With Andreas Peichl, John E. Roemer and Martin Ungerer
Social Choice and Welfare, 2017, 49 (3-4), pp. 499-544
Many studies have estimated the effect of circumstances on income acquisition. Perhaps surprisingly, the fraction of inequality attributable to circumstances is usually quite small—in the advanced democracies, approximately 20%. One reason for this is the lack of data on circumstance variables in empirical research. Here, we argue that all behaviors and accomplishments of children should be considered the consequence of circumstances: that is, an individual should not be considered to be responsible for her choices before an age of consent is reached. Using two data sets that contain data on childhood accomplishments, other environmental circumstances and the income as an adult, we calculate that the fraction of income inequality due to circumstances in the US rises from 27 to 43% when accounting for childhood circumstances. In the UK it rises from 18 to 27%.
The Local Impacts of Large-Scale Land Acquisitions: A Review of Case Study Evidence from Sub-Saharan Africa (with Daniel F. Heuermann). Journal of Contemporary African Studies, 2017, 35 (2), pp. 168-189.