Inequality of Opportunity and Income Redistribution

Opportunities, such as access to education or family background, shape income inequality by influencing an individual's chances of economic success. In the presence of unequal opportunities, whether someone's success is mainly due to merit or luck is thus often uncertain. We examine how unequal opportunities shape preferences for redistribution in light of such uncertainty, and draw comparisons to other, more transparent forms of luck commonly implemented in the literature. We elicit redistribution decisions over workers' earnings from a U.S.-representative sample (impartial "spectators") in two environments: when the workers' earnings can be influenced by luck directly through coin flips ("lucky outcomes") or indirectly through a relative advantage ("lucky opportunities"). In both environments, spectators face uncertainty about whether the inequality between workers is merit-based. We find that spectators redistribute less and are less sensitive to differences in luck in the form of opportunities. The inferential challenges inherent to lucky opportunities are a critical driver of this redistribution gap. Our results suggest that real-world support for redistribution may be less elastic to changes in inequality of opportunity than previous findings indicate.