On the welfare loss caused by inequality of opportunity

Based on the ethical principle of equality of opportunity, this paper presents a measure of the welfare loss that is caused by an unfair distribution of a particular outcome (income, health, education, etc). The key idea is that a fair society should produce outcomes that depend on individuals’ effort and not on their external circumstances such as gender, socioeconomic background, etc. We propose measuring inequality of opportunity as the welfare loss attributed to the outcome differences among individuals who exert a similar level of effort. Our results are in line with those aspects of fairness literature that give priority to the ex post compensation approach to equality of opportunity. Finally, we present an empirical application for the measurement of the welfare loss in the income distribution in Europe. We have observed a high degree of heterogeneity among European countries. The welfare loss due to inequality of opportunity ranges in those, from basically zero to almost one fifth of their potential welfare.     

An Adversarial Risk Analysis Framework for Cybersecurity

Risk analysis is an essential methodology for cybersecurity as it allows organizations to deal with cyber threats potentially affecting them, prioritize the defense of their assets, and decide what security controls should be implemented. Many risk analysis methods are present in cybersecurity models, compliance frameworks, and international standards. However, most of them employ risk matrices, which suffer shortcomings that may lead to suboptimal resource allocations. We propose a comprehensive framework for cybersecurity risk analysis, covering the presence of both intentional and nonintentional threats and the use of insurance as part of the security portfolio. A simplified case study illustrates the proposed framework, serving as template for more complex problems.     

The contribution of changes in employment composition and relative returns to the evolution of wage inequality: the case of Spain

Wage inequality in Spain decreased slightly between 1995 and 2006 despite significant changes in employment composition. Changes in the composition of the workforce would have increased inequality keeping constant wage structure, but changes in wage differentials are the most important factor determining the evolution of inequality. By subperiods, the low end of the wage distribution compressed between 1995 and 2002, while it experienced a slight increase in inequality afterward, as it was observed in the USA. On the other hand, in contrast to the American case, the high end of the wage distribution was strikingly compressed in the second period.