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

52 Pages Posted: 10 Oct 2016

See all articles by David Bjerk

David Bjerk

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

Abstract

This paper uses a laboratory experiment 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 group of participants propose redistribution levels inconsistent with financial self-interest, where this group is primarily made up of those with the least to lose financially from making such a proposal, and the size of this group increases when participants can communicate prior to proposing. Survey data from the National Longitudinal Survey of Youth and General Social Survey show that these experimental findings may help shed light on the way preferences for redistribution evolve with age in the real world.

Keywords: redistribution, laboratory experiment, veil of ignorance, progressive taxation

JEL Classification: H2, D3

Suggested Citation

Bjerk, David, In Front of and Behind the Veil of Ignorance: An Analysis of Motivations for Redistribution. IZA Discussion Paper No. 10259. Available at SSRN: https://ssrn.com/abstract=2849744

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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