Experienced Inequality and Preferences for Redistribution

71 Pages Posted: 30 Jan 2017

See all articles by Christopher Roth

Christopher Roth

University of Warwick, Faculty of Social Studies, Department of Economics, Students

Johannes Wohlfart

University of Copenhagen

Multiple version iconThere are 2 versions of this paper

Date Written: September 2017

Abstract

We examine whether individuals’ experienced levels of income inequality affect their preferences for redistribution. We use several large nationally representative datasets to show that people who have experienced higher inequality during their lives are less in favor of redistribution, after controlling for income, demographics, unemployment experiences and current macroeconomic conditions. They are also less likely to support left-wing parties and to consider the prevailing distribution of incomes to be unfair. We provide evidence that these findings do not operate through extrapolation from own circumstances, perceived relative income or trust in the political system, but seem to operate through our respondents’ fairness views. Our evidence suggests that being accustomed to an unequal distribution of incomes can make people more accepting of inequality and reduce their demand for redistribution.

Keywords: inequality, redistribution, macroeconomic experiences, fairness

JEL Classification: P160, E600, Z130

Suggested Citation

Roth, Christopher and Wohlfart, Johannes, Experienced Inequality and Preferences for Redistribution (September 2017). CESifo Working Paper Series No. 6251, Available at SSRN: https://ssrn.com/abstract=2908017 or http://dx.doi.org/10.2139/ssrn.2908017

Christopher Roth

University of Warwick, Faculty of Social Studies, Department of Economics, Students ( email )

Coventry, CV4 7AL
United Kingdom

Johannes Wohlfart (Contact Author)

University of Copenhagen ( email )

Øster Farimagsgade 5
Building 35
Copenhagen, DK-1353
Denmark

HOME PAGE: http://https://sites.google.com/site/johanneswohlfartecon/home

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