The importance of the future when deciding levels of personal responsibility and demand for redistribution

Abstract

We experimentally investigate the link between individuals' value on future incomes and their support for redistributive policies today. The investigation identifies time preferences as a key driver of redistributive policies via their effect on personal responsibility, defined as costly but productive effort. The investigation also accounts for the strategic interplay between individuals in the choice of effort, identifying two key strategies: either exercise more effort and ask for less redistribution or free ride on others’ efforts, asking for more redistribution. We find that individuals oriented toward the future tend to invest more and ask for less redistribution. We discuss the policy implications of this result.