Who Cares? Attitudes Towards Redistribution and Fiscal Austerity
72 Pages Posted: 12 Nov 2021
Date Written: 2021
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: Suggested Citation