Do Unprejudiced Societies Need Equal Opportunity Legislation?

David de Meza

The Centre for Market and Public Organisation from The Centre for Market and Public Organisation, University of Bristol, UK

Abstract: To what extent should banks, insurance companies and employers be allowed to use personal information about the people whom they lend to, insure or employ in setting the terms of the contract? Even when different treatment is motivated by profit not prejudice, banning discrimination (when combined with mandatory protection against failure) may well be the best way of effecting redistribution of income. Unlike income taxation this policy achieves its goals without much adverse effect on incentives. Public provision of low-powered incentive contracts issued on generous terms is also a potent instrument of efficient redistribution. This is true even if the government cannot observe type but the private sector can.

Keywords: equal opportunities; incentives; contracts; asymmetric information; distribution (search for similar items in EconPapers)
JEL-codes: D3 D8 H2 J7 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2002-12
New Economics Papers: this item is included in nep-cdm and nep-mfd
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Related works:
Working Paper: Do Unprejudiced Societies Need Equal Opportunity Legislation? (2003)
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