Nathaniel Hendren is a Professor of Economics at Harvard University and a Founding Co-Director of the Equality of Opportunity Project. His work is motivated by the question: Do markets provide opportunity? He uses a combination of theoretical and empirical analysis to document the extent of equality of opportunity, understand when and why markets may fail to provide it, quantify the impact of these market failures, and provide tools to normatively evaluate potential policy solutions.
His work has documented the extent of equality of opportunity across a range of domains, from the inability of individuals to purchase insurance, to the difficulties faced by low-income children seeking upward mobility, and more recently the disparities in intergenerational mobility experienced by children of different races. In some cases, forces like asymmetric information prevents market existence, such as insurance markets for those with “pre-existing health conditions. In others, externalities are the primary culprit, as in the case of health insurance for low-income adults. In other cases, low-income families may simply be unable to afford better neighborhoods for their children, even if such investments would pay off in the long run. In many cases, the precise underlying mechanisms are important for understanding the welfare implications of government policies. His work on the marginal value of public funds and efficient welfare weights provide empirical methods to evaluate the cost effectiveness and social value of government policy changes to address market imperfections.