Limited budgets and equality of opportunity in health Guillem Lopez-Casasnovas guillem.lopez@upf.edu Center for Research in Health and Economics (CRES) Department of Economics - Universitat Pompeu Fabra Ramon Trias Fargas, 25-27 - 08005 Barcelona, Spain Héctor Pifarré i Arolas 1 pifarreiarolas@demogr.mpg.de Center for Research in Health and Economics (CRES) Max Planck Institue for Demographic Research Konrad-Zuse-Strasse 1 - 18057 Rostock, Germany Frederic Udina frederic.udina@upf.edu Department of Economics - Universitat Pompeu Fabra Ramon Trias Fargas, 25-27 - 08005 Barcelona, Spain Keywords: equality of opportunity; Health; limited budget; capacity to benefit Classification codes: I140 Health and Inequality I180 Health: Government Policy; Regulation; Public Health D630 Equity, Justice, Inequality, and Other Normative Criteria and Measurement Acknowledgements: The authors thank Carmen Herrero, Humberto Llavador, Adeline Lo and Antonio Villar Notario for for advice and support. Manja Janoswki provided excellent research assistance. All errors are our own. Highlights: • In applications such as health care, limited resources often prevent the achievement of full equality of opportunity. • We argue that given a limited budget, society should judge not only between fair and unfair inequalities, but also which disadvantaged groups to target with public compensation. • Our proposal frames this decision as a trade-off between compensating the worst-off groups and groups with a higher capacity to benefit. 1 Corresponding author: Email: pifarreiarolas@demogr.mpg.de; Phone: +49 (0)381 2081-171.