Experienced Inequality and Preferences for Redistribution

TY - UNPB

T1 - Experienced Inequality and Preferences for Redistribution

AU - Roth, Christopher

AU - Wohlfart, Johannes

PY - 2016/7/14

Y1 - 2016/7/14

N2 - We examine whether individuals’ experienced levels of income inequality affect their preferences for redistribution. We use several large nationally representative datasets to show that people who have experienced higher inequality during their lives are less in favor of redistribution, after controlling for income, demographics, unemployment experiences and current macroeconomic conditions. They are also less likely to support left-wing parties and to consider the prevailing distribution of incomes to be unfair. We provide evidence that these findings do not operate through extrapolation from own circumstances, perceived relative income or trust in the political system, but seem to operate through our respondents’ fairness views. Our evidence suggests that being accustomed to an unequal distribution of incomes can make people more accepting of inequality and reduce their demand for redistribution.

AB - We examine whether individuals’ experienced levels of income inequality affect their preferences for redistribution. We use several large nationally representative datasets to show that people who have experienced higher inequality during their lives are less in favor of redistribution, after controlling for income, demographics, unemployment experiences and current macroeconomic conditions. They are also less likely to support left-wing parties and to consider the prevailing distribution of incomes to be unfair. We provide evidence that these findings do not operate through extrapolation from own circumstances, perceived relative income or trust in the political system, but seem to operate through our respondents’ fairness views. Our evidence suggests that being accustomed to an unequal distribution of incomes can make people more accepting of inequality and reduce their demand for redistribution.

KW - Inequality

KW - Redistribution

KW - Macroeconomic Experiences

KW - Fairness

U2 - 10.2139/ssrn.2809655

DO - 10.2139/ssrn.2809655

M3 - Working paper

T3 - CESifo Working Papers

BT - Experienced Inequality and Preferences for Redistribution

ER -