Building on earlier work by political philosophers, economists have recently sought to define a concept of equity that accommodates the fairness of reward to individual responsibility and effort, while allowing for the existence of some inequalities which are unfair and should be compensated. This paper – commissioned as a chapter for the Oxford Handbook of Well Being and Public Policy – provides a critical review of the economic literature on equality and inequality of opportunity. A simple 'canonical model' of equal opportunity is proposed, and used to explore the two fundamental concepts in this (relatively) new theory of social justice: the principles of compensation and reward. Ex-ante and ex-post versions of the compensation principle are presented, and the tensions between them are discussed. Different approaches to the measurement of inequality of opportunity – and empirical applications – are reviewed, and implications for the measurement of poverty and of the rate of economic development are discussed.

We examine whether brother similarities in occupational status are rooted in the same underlying family characteristics that affect brother similarities in income. We extend previous research using sibling correlations as an omnibus measure of total family background impact on a given outcome by directly quantifying how sibling correlations in occupational status and income overlap. We apply a novel variance components model to data from Denmark and the United States, two countries known to follow a contradictory pattern: While income mobility is much lower in the United States, occupational mobility is virtually similar. Apart from confirming this pattern, we find a substantial overlap, around 70 percent, in brother similarities in income and occupational status in both countries. Conventional family background variables account for only about one-fifth of this overlap in each country, suggesting that shared family origins of attainment in these two domains are constituted by largely unknown family characteristics. We discuss what these characteristics might be.

Green bonds are debt securities whose proceeds are used for environmentally friendly purposes. It is a fast growing market with more than$500bn capital raised in 2021. We study how investors’ environmental risk perception affects green bond pricing. To assess causality, we focus on exogenous shocks induced by the occurrence of natural disasters. We use a sample of 781 green bond emissions matched with comparable brown bonds. The evidence shows that the price of green bonds increases relative to that of comparable brown bonds following a natural disaster, both at bond issuance and in the secondary market. Also, the severity of the disaster explains the magnitude of the price increase, as disasters affecting a larger number of people result in a greater increase in price. This price increase is temporary, as green bond prices revert to pre-disaster levels after a few months. Overall, the evidence is consistent with a temporary overreaction by investors in terms of perceived environmental risk.

By examining and comparing such components as welfare, education and innovation policies, cultural dimensions, and labor market regulation, the contribution attends to both commonalities and divergences between the four Southern European countries, identifying the main reasons behind the poor performance of their economies and slow recovery from the Great Recession of 2007–2008. It also sheds light on the process of diversification among the four countries and addresses whether it did and still does make sense to speak of a uniquely Mediterranean model of capitalism.

Institutional Economics can be considered a huge success story as today, almost nobody would dispute its main claim that “institutions matter”. Yet, for a long time, social norms and other informal institutions played a minor role at best in this success story. In my talk, I will therefore focus on social norms and discuss why they could be so important for societal development, on the necessary compatibility between formal and informal institutions and on why so many informal institutions seem to eschew attempts at deliberate change. Some of these insights have direct policy implications.