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 e ort 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 e ort 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.