The Network of Injustice: A Novel Approach to Inequality of Opportunity

Restoring the theoretical foundation of John Roemer’s conceptualization of inequality of opportunity (IOp), we introduce an innovative empirical approach to measure unfair inequalities through Bayesian networks. This methodology enhances our understanding of income inequality through structural learning algorithms, generating an IOp index and, most importantly, shedding light on the underlying income formation process. We demonstrate how this proposal relates to established measurement methods through simulated data, and provide an application to five European countries to illustrate the potential of Bayesian networks in the context of measuring inequality of opportunity. (Stone Center on Socio-Economy Inequality Working Paper)