Perceived Inequality and Preferences for Redistribution Among High Earners: Do Reference Groups Matter?

22 Pages Posted: 22 Sep 2021

See all articles by Clement Bellet

Clement Bellet

Erasmus University Rotterdam (EUR)

Dylan Glover

INSEAD

Mark Stabile

INSEAD; National Bureau of Economic Research (NBER)

Date Written: August 2021

Abstract

Understanding attitudes towards inequality among the ``working rich" matters for any policy aimed at increasing the level of redistribution in society. We investigate this question using a unique sample of nearly 1,000 graduates from a highly ranked MBA program and a representative sample of Americans. We first show that high-earning MBAs are far more likely to know their rank in the income distribution. We then explore whether and how comparisons with peers or others (i.e. reference groups) shape their preferences for redistribution. Asking them to rank within their family, colleagues or classmates leads to an average 18\% drop in the income share allocated to the richest 1\% but has no discernible effect on their taxation preferences. We discuss the respective contribution of the comparative and normative functions of reference groups as potential mechanisms.

Suggested Citation

Bellet, Clement and Glover, Dylan and Stabile, Mark, Perceived Inequality and Preferences for Redistribution Among High Earners: Do Reference Groups Matter? (August 2021). Available at SSRN: https://ssrn.com/abstract=3928786

Clement Bellet (Contact Author)

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Dylan Glover

INSEAD

Mark Stabile

INSEAD ( email )

Boulevard de Constance
F-77305 Fontainebleau Cedex
France

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
41
PlumX Metrics