Discussion Paper

No. 2016-38 | August 17, 2016
Doing Rawls Justice: Evidence from the PSID

Abstract

Distributive value judgments based on the 'origins' of economic inequalities (e.g. circumstances and responsible choices) are increasingly evoked to argue that 'the worst form of inequality is to try to make unequal things equal'. However, one may reasonably agree that distributive value judgments should also account for the 'consequences' of economic inequalities in such a way as to (i) improve economic efficiency and (ii) prevent from subordination, exploitation and humiliation. In this way of thinking, by resorting the well-known Rawlsian 'fair equality of opportunity' and 'difference principle', the author proposes a pragmatical non-parametric estimation strategy to compare income distributions in terms of Rawlsian inequity and its contribution to overall inequality. The latter methodology is applied to PSID data from 1999 to 2013 and compared with existing empirical evidences on Roemer’s (A Pragmatic Theory of Responsibility for the Egalitarian Planner, 1993, and Equality of Opportunity, 1998) inequality of opportunity. Remarkably, Rawlsian inequity is found between 56% and 65% of the overall income inequality, with an increasing pattern originating from the recent economic crisis.

Data Set

JEL Classification:

D63, I32, D3

Assessment

  • Downloads: 421

Links

Cite As

Antonio Abatemarco (2016). Doing Rawls Justice: Evidence from the PSID. Economics Discussion Papers, No 2016-38, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2016-38


Comments and Questions


Peder J. Pedersen - Invited Reader Comment
September 29, 2016 - 10:06

Antonio Abatemarco. Doing Rawls Justice: Evidence from the PSID.

This is an interesting paper presenting an empirical application of theoretical concepts from Rawls on equality and equity in the distribution of disposable incomes.
The paper presents a theoretical formalization of Rawlsian inequity with a distinction between Fair Equality of ...[more]

... Opportunities and the Difference Principle. The discussion and analysis of the Difference Principle contains interesting – and empirically relevant – subsections on inequality and growth and on pro-poor growth. Next, a theoretical section develops an estimation strategy to be applied to US PSID data for the period 1999 – 2013. The results appear interesting finding that Rawlsian inequity is becoming increasingly more important – and dominant – especially so in the years following the onset of the Great Recession.
Concluding this short comment, this paper has potentially interesting empirical results for readers interested in policy related to distribution in a period of strongly increasing inequality. Further, for the more specialized reader in the philosophical foundations of the interpretation and evaluation of inequality, the paper offers original and interesting insights.
Peder J. Pedersen
Aarhus University


Anonymous - Reply to Invited Reader Comment
October 14, 2016 - 16:24

Dear Prof. Pedersen,
thanks for your comments. I'm glad to see that you appreciated my paper. As I wrote in the paper, the contribution is expected to be methodological and empirical. However, I do agree with you (actually, I hope) when you write that "for the more specialized reader in ...[more]

... the philosophical foundations of the interpretation and evaluation of inequality, the paper offers original and interesting insights".

Thanks once again,
Antonio


Anonymous - Referee Report 1
October 10, 2016 - 09:23

see attached file


Anonymous - Reply to Referee 1
October 14, 2016 - 16:16

Reply to Referee 1 in attached.
Thanks,
Antonio Abatemarco


Anonymous - Referee Report 2
November 03, 2016 - 12:21

see attached file


Antonio Abatemarco - Reply to Referee 2
November 04, 2016 - 10:29

Dear Referee 2,
thanks for your comments and suggestions.
Please, see attached file.
Regards,
Antonio Abatemarco