Understanding Changes in Attitudes towards Redistribution and Government after the Great Recession

Abstract

Using the first release of the three-wave, four-year General Social Survey panel dataset, we track changes in attitudes towards redistribution and government from 2006 to 2010 to find that decreases in demand for redistribution are associated with decreases in confidence in government after the Great Recession. We use latent class analysis to systematically account for heterogeneity in preferences and uncover four to five distinct preference groups. A variety of personal characteristics predict group membership, yet movement between and within groups is associated with changes in confidence in government. Our findings indicate that political party identification is an important channel through which confidence in government shapes preferences for redistribution. This paper contributes to a growing body of literature that suggests an association between government trust and demand for redistribution. We view our results as suggestive, yet we do perform a series of falsification tests that show the decrease in confidence in government across this time period is not associated with a general desire for smaller government.

Keywords: Finite Mixture Models, Redistribution Preferences, Confidence in Government, General Social Survey, Panel Data

JEL Classification: C23, C38, D31, H50, H53, I38, P16