No. 1005: Unequal Societies with Equality of Opportunity

Giorgos Galanis Queen Mary University of London Roberto Veneziani Queen Mary University of London

July 21, 2026

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Abstract

Is long-term income inequality consistent with equality of opportunity (EOp)? We
study a dynamic economy in which one generation’s inequality shapes the socio-economic
status, and hence the circumstances, of the next, with status a positional good governing
the returns to effort. We show that a maximin EOp policy cannot sustain the
welfare of full equality: from every starting point the intergenerational welfare floor lies
strictly below its egalitarian level. A myopic, within-generation policy drives an initially
more equal economy to an ever more unequal steady state. If the date of birth is
taken as a circumstance too, the intergenerational EOp policy remains consistent with
high and persistent inequalities in welfare, income, and status. EOp policies produce
results that seem at odds with the general EOp ethic. For they may lead inequalities
to remain constant or even increase over time, even though these inequalities are not
the product of individual responsible choices.

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