In Front of and Behind the Veil of Ignorance: An Analysis of Motivations for Redistribution Inside and Outside the Lab

49 Pages Posted: 5 May 2012

See all articles by David Bjerk

David Bjerk

Claremont McKenna College - Robert Day School of Economics and Finance; IZA Institute of Labor Economics

Date Written: May 4, 2012

Abstract

This paper uses a laboratory experiment and real world data to explore individuals' motivations for redistribution. The laboratory results show that as income uncertainty diminishes, participants become more extreme in their preferences for redistribution. The findings suggest that for most people, the motivation for redistribution is financial self-interest -- namely as insurance against future bad luck -- rather than furthering equity. However, a non-negligible fraction propose redistribution levels inconsistent with financial self-interest, and this fraction increases when participants can communicate prior to proposing. Data from the GSS show that these experimental findings help shed light on the ways preferences for redistribution evolve with age.

Keywords: Redisitribution, laboratory experiment, veil of ignorance, progressive tax, aging

JEL Classification: H2, D3

Suggested Citation

Bjerk, David, In Front of and Behind the Veil of Ignorance: An Analysis of Motivations for Redistribution Inside and Outside the Lab (May 4, 2012). Claremont McKenna College Robert Day School of Economics and Finance Research Paper No. 2012-04. Available at SSRN: https://ssrn.com/abstract=2051195 or http://dx.doi.org/10.2139/ssrn.2051195

David Bjerk (Contact Author)

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

500 E. Ninth St.
Claremont, CA 91711-6420
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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