Learning About Income Inequality: What is the Impact of Information on Perceptions of Fairness and Preferences for Redistribution?
79 Pages Posted: 24 Aug 2014
Date Written: August 22, 2014
This paper studies whether limited information about inequality accounts for the (optimistic) beliefs and the (anti-tax) preferences of American voters. Unlike standard surveys, this experiment examines preferences for taxation while controlling for perceived economic opportunity, beliefs about how the economy works, and views about the sources of inequality. Random assignment to information exposure about income inequality is used to identify a causal relationship between awareness about income inequality and the perceived fairness of the economy. The first effect of information is an increase in pessimism about economic opportunity. After exposure to data, subjects are less likely to believe that people who work hard can get ahead in life through hard work alone (the odds of holding this view fall by one third). Many subjects say they are surprised by the data, and learning how much households in the top 0.1% earn raises support for general, unspecified government action against inequality by about 6 percentage points. However, the subjects who are exposed to information are not more willing to take specific action (pay higher taxes) compared to the uninformed control group.
Keywords: inequality, mobility, experiment, redistribution, MTurk
JEL Classification: H2, D8
Suggested Citation: Suggested Citation