Inequality and U.S. Policy Mood Across Space and Time

Abstract

While classic theories suggest that aggregate inequality implies support for social welfare, recent research suggests the opposite: high inequality periods of U.S. history are associated with more limited government preferences than low inequality periods. We reconsider this conclusion. First, we assess the methods of recent research, and find that the claims made are not robust to important corrections. We then introduce a new methodological approach, leveraging spatial variation in local inequality, and examining average differences in preferences across geographic context. In both our reconsideration of the recent literature, and our methodological extensions, we find little evidence for a relationship of inequality to mass preferences. We conclude that objective variation in inequality plays but a small direct role in structuring the social welfare preferences of citizens.