Who Cares? Attitudes Towards Redistribution and Fiscal Austerity

72 Pages Posted: 12 Nov 2021

See all articles by Sarah Brown

Sarah Brown

University of Sheffield - Department of Economics; IZA Institute of Labor Economics

Alexandros Kontonikas

Essex Business School

Alberto Montagnoli

University of Sheffield

Mirko Moro

University of Stirling

Dafni Papoutsaki

University of Brighton

Willem Sas

University of Stirling - Department of Economics; KU Leuven - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 2021

Abstract

We present new evidence showing that fiscal austerity strengthens support for redistribution, especially for the relatively well-off. Our theoretical model proposes two mechanisms to explain this heterogeneity in support for redistribution: ‘altruism’ and ‘appreciation’. We test our theoretical model’s predictions by matching attitudes reported in the British Social Attitudes Survey with local area-level spending cuts in England over the period 2010 to 2015. We exploit the spatial and temporal variation in spending cuts at the Local Authority level to compute a plausibly exogenous measure of the austerity shock. We find evidence for these two channels.

Keywords: austerity, fiscal consolidation, fiscal policy, redistribution, political attitudes, altruism, appreciation

JEL Classification: D300, D640, E620, H200, H300, H600

Suggested Citation

Brown, Sarah and Kontonikas, Alexandros and Montagnoli, Alberto and Moro, Mirko and Papoutsaki, Dafni and Sas, Willem, Who Cares? Attitudes Towards Redistribution and Fiscal Austerity (2021). CESifo Working Paper No. 9393, Available at SSRN: https://ssrn.com/abstract=3959447 or http://dx.doi.org/10.2139/ssrn.3959447

Sarah Brown (Contact Author)

University of Sheffield - Department of Economics

9 Mappin Street
Sheffield, S1 4DT
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Alexandros Kontonikas

Essex Business School ( email )

University of Essex
Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Alberto Montagnoli

University of Sheffield

17 Mappin Street
Sheffield, S1 4DT
United Kingdom

Mirko Moro

University of Stirling

Stirling, Scotland FK9 4LA
United Kingdom

Dafni Papoutsaki

University of Brighton ( email )

Mithras House
Lewes Road
Brighton BN2 4AT
United Kingdom

Willem Sas

University of Stirling - Department of Economics ( email )

Stirling, FK9 4LA
United Kingdom

KU Leuven - Department of Economics ( email )

Leuven, B-3000
Belgium

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