Redistribution Preferences and Life-Cycle Income

42 Pages Posted: 1 Aug 2011 Last revised: 30 Aug 2011

See all articles by Timo Idema

Timo Idema

University of Oxford - Department of Politics and International Relations

David Rueda

University of Oxford

Date Written: 2011

Abstract

Most distributive theories in political economy understand individuals to be motivated by material self-interest, often approximated by their current positions in the income distribution. In this paper, we challenge this traditional view. The key to our argument is that individual preferences for more or less redistribution are the result of agents maximizing their life-cycle income, and not just their current income. Based on the labour economics literature on life-cycle profiles (Mincer 1974, Solon: 1992, Baker 1997, Haider & Solon 2006), we propose a simple way of estimating the present value of an individual's expected future income. As expectations about life-cycle incomes are the resultant of the interplay of age and education, our approach offers promising new insights into the effects of these variables on redistribution preferences. We use data from the European Social Survey to estimate expected life-cycle incomes and evaluate the extent to which our approach improves our understanding of distributive politics.

Suggested Citation

Idema, Timo and Rueda, David, Redistribution Preferences and Life-Cycle Income (2011). APSA 2011 Annual Meeting Paper, Available at SSRN: https://ssrn.com/abstract=1903322

Timo Idema

University of Oxford - Department of Politics and International Relations ( email )

Manor Road
Oxford, OX1 3UQ
United Kingdom

David Rueda (Contact Author)

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

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