Knowledge that Transforms

Women began to enter nontraditional occupations at an increasing rate at the same time federal equal opportunity policy was strengthened. In 1972, equal employment opportunity (EEO) policy was strengthened and expanded, and equal opportunity in education became federal policy for the first time. These policies constitute a two-pronged attack on sex discrimination because they address impediments to mobility on both the demand and supply sides of the labor market. Together, they should increase women's access to nontraditional jobs and to the skills necessary to perform them. During the 1970's, women made occupational gains that are concentrated disproportionately in the white-collar occupations. One explanation for this is that the impact of federal equal opportunity policy differs across schooling levels. In Section I, I discuss federal equal opportunity policy. Section II contains empirical evidence on the direct effects of EEO policy on sex differentials in earnings and occupational segregation by sex. Section III presents estimates of changes in the effect of schooling on women's entry into nontraditional occupations during the 1970's, and attempts to determine what portion may be due to equal educational opportunity policy and to indirect effects of EEO policy.

In the past few years, several economists, notably Duncan Foley, Hal Varian, E. A. Pazner and David Schmeidler, have produced a novel analytical theory of fairness in the distribution of resources, in contradistinction to the efficiency of their allocation. This work is primarily philosophical in orientation, being concerned primarily with the logical underpinnings of an analysis of fair division, rather than with its application. Here, I offer a nontechnical introduction to the subject, providing a few new results about the construction. But this is only a preliminary to an attempt to show how fairness theory can be used to study policy, employing the issue of rationing of commodities as an illustration. Persons who design public policy are, typically, at least as concerned with issues of equity as with allocative efficiency. The economist's influence is therefore impeded by his inability to deal with issues of fairness in applied problems. Fairness theory, perhaps for the first time, provides an analytic instrument for the purpose. Inevitably, it must, of course, rest upon value judgments as well as observable relationships. But what is remarkable about fairness theory is that both the behavioral relationships and the value judgments on which it is based are, essentially, those used in the standard welfare analysis of resource allocation. In both, the basic data are consumer preferences and production relationships, and in both the basic value judgment is that the desires of the affected individuals, rather than those of some superior arbitrator, must count. Our illustrative policy issue-the rationing of commodities-has reemerged with the fuel problem. Here, I will examine the choice between two points-rationing arrangements, under which consumers are each issued a fixed number of ration points, redeemable at a fixed Pg, per gallon of gasoline, or at another coupon price, P*h per gallon of heating oil, etc. The consumer is thereby subjected to a second budget constraint expressed in ration points rather than money. Economists have suggested that the efficiency of such a rationing system can be improved if it is accompanied by a market, in which consumers with unwanted ration coupons can sell them to others at a market-clearing (money) price. I will show that while there is a valid efficiency argument favoring the white market arrangement over one in which the sale of ration coupons is prohibited, fairness analysis yields a presumption that goes the other way. This may provide some justification for the apparently widespread suspicion of the fairness of white markets among noneconomists.

Depending on ethical beliefs, different decisions emerge for resolving the carbon dioxide (CO/sup 2/) issue. It is doubtful that an international consensus can be reached on a correct ethical criterion. Perhaps the best strategy would be to delay acceptance of either a particular set of beliefs or the existing scientific evidence and wait for more-accurate and conclusive research to emerge. If the scientific evidence is accepted as valid, and all future generations that will exist are evaluated equally, then the optimal current regulatory strategy is to restrict, as much as possible, current emissions of CO/sup 2/. 17 references, 2 figure, 1 table.