Preferences For Redistribution Research Articles

The quality of government conditions political disagreement over redistributive policies

ABSTRACT This study argues that the quality of government structures the divide of public opinion on redistribution within countries. Countries with higher government quality have both the capacity and impartiality required to implement effective and fair redistribution. In effect, material self-interest and fairness-based evaluations should become better predictors of policy preferences in countries with higher government quality. An empirical analysis of survey data from 40 institutionally diverse countries supports this theory. Interaction regression models show that the government quality moderates the effects of income and unfairness perceptions on redistribution preferences. Both preference drivers are more strongly associated with redistribution support in countries with higher government quality. Preferences thereby become more heterogeneous in higher-quality settings. The results offer micro-level support for the theory that government quality structures politics and policies via the public opinion channel. To the extent that public opinion influences political behavior and policymaking, higher government quality should induce a stronger economic left-right divide over these political phenomena.

Industry comparative advantage and support for redistribution: A cross-country cross-industry analysis of the political economy of trade

A fundamental insight of various trade theories is that trade does not have a universally negative effect on different business activities in different countries. Rather, trade’s impact varies concomitantly with the specific country and activity considered. This empirical note expands prior work linking trade to redistribution preferences by using sectoral comparative advantage to incorporate the notion that trade may hurt the prospects of a specific group in one country (e.g. workers in a highly tradeable or offshorable industry) but will simultaneously benefit this same group in another country. We expect that individuals in industries with a weaker (stronger) comparative advantage suffer (benefit) more from trade and are therefore more (less) in favour of redistribution. Empirical results confirm this expected effect of comparative advantage on redistribution preferences. We conclude that considering countries’ comparative (dis)advantage in certain activities provides a deeper and more general understanding of the political consequences of trade.

Protecting the environment for a brilliant future: prospects of upward mobility and environmental willingness to pay in China

ABSTRACT This paper examines how the prospects of upward mobility (POUM) affects the willingness to pay (WTP) for environmental protection. The POUM may increase environmental WTP through an income effect and an elevated preference for environmental protection. On the other hand, environmental protection serves the role of redistribution as the rich pay more for it through progressive taxes and benefit less because they have more means to avoid harm from pollution. The POUM could thus decrease the WTP for environmental protection as it reduces the preference for redistribution. Using a nationally representative dataset, we find that positive POUM leads to higher environmental WTP, controlling for the current income level and other important determinants. We also find evidence consistent with environmental protection as a redistribution policy hypothesis: the POUM increases environmental WTP more among those with higher redistribution tendencies because the POUM would not reduce environmental WTP as redistribution as much.

Beyond Secession: Substate Nationalism and Support for Redistribution in Spain

This article explores how and why substate nationalism shapes support for redistribution. An experiment embedded in an original survey reveals that in Spanish regions with extensive substate nationalist mobilization, preferences for redistribution vary based on the proposed boundaries of redistribution. In this context, individuals have preferences regarding where redistribution will occur, and not just on how much there will be. The results provide the first micro-level evidence for how preferences for redistribution depend on the geographic boundaries of a proposed policy and why mobilized group identities interact with those preferences to determine support for redistribution. The findings suggest that substate nationalist mobilization has significant implications for policy preferences beyond secession.

Automation anxiety, fairness perceptions, and redistribution: Past experiences condition the response to future job loss

Do beliefs about fairness interact with past experiences of labor market shocks to condition redistributive preferences? In a large-scale survey experiment, we investigate the effect of informing individuals that growth in automation could disrupt labor markets in ways that are (possibly) viewed as unfair. We then exploit the COVID-19-induced labor market shock to test for an interaction between treatments and shock exposure. We find that beliefs interact with shock exposure to increase redistributive preferences and commitments to donate potential prize winnings. Our findings suggest this may be motivated by respondents' concerns about their vulnerability to future labor market shocks.

The ICT revolution and preferences for taxing top earners

ABSTRACT How has the ICT-driven transformation of labour markets in recent decades affected redistributive preferences? We move beyond existing research by focusing on the ‘winners’ of the ICT revolution and on other-regarding preferences for taxing top earners. We carry out an interactive, online experiment with around 3000 US respondents to test whether fairness perceptions and redistributive preferences differ when top incomes are gained through luck, routine work, or complex work. This set up aims to mirror the changing nature of tasks performed by high-earning workers in the US labour market as a result of the ICT revolution. We find that the desired tax rate on top earners is up to 5.3 percentage points lower for the complex work than the routine work treatment, and that high incomes from complex work are perceived as fairer and more deserved. A follow-up vignettes study then provides strong evidence that high-earning jobs are perceived to be more complex. Taken together, our findings highlight an important and previously under-explored channel through which the ICT revolution may have dampened demand for progressive taxation in the advanced democracies.

The Effect of Information About Local Demand for Redistribution on Support for Territorial Transfers Among Affluent Groups

Many multitier polities have some scheme of territorial-based redistribution, which plays a crucial role in mitigating territorial inequality. This article looks at the public opinion on inter-regional transfers and argues that: (1) perceptions of aggregate electoral support for interpersonal redistribution in the region affect support for inter-regional redistribution independently of perceptions about the region’s economic conditions and (2) perceptions of high electoral support for interpersonal redistribution among the region’s affluent can lead them to favor territorial transfers, because these transfers may work as a mechanism for local redistribution cost displacement. We test our argument using a survey experiment in which we provide information about regional economic conditions and aggregate demand for interpersonal redistribution. Our contribution highlights that the aggregate demand for interpersonal redistribution within regions is not necessarily endogenous to regions material conditions, and that the perception of this aggregate demand by the affluent affects their inter-regional redistributive preferences.

The Political Effects of Immigration: Culture or Economics?

We review the growing literature on the political economy of immigration. First, we discuss the effects of immigration on a wide range of political and social outcomes. The existing evidence suggests that immigrants often, but not always, trigger backlash, increasing support for anti-immigrant parties and lowering preferences for redistribution and diversity among natives. Next, we unpack the channels behind the political effects of immigration, distinguishing between economic and noneconomic forces. In examining the mechanisms, we highlight important mediating factors, such as misperceptions, the media, and the conditions under which intergroup contact occurs. We also outline promising avenues for future research. (JEL D72, H23, J11, J15, K37, R23, Z13)

Redistributive policy and redistribution preferences: the effects of the Moscow redevelopment program

ABSTRACT How does inclusion in social policy programs strengthen individuals’ support for redistribution, and lead to spillovers in support for future social policy programs? We study a unique dataset of 1,300 Moscow residents to estimate the effect of participating in a government-sponsored redevelopment program on preferences for redistributive social policy. Our design exploits features of the program designed to foster institutional trust by engaging citizens in the policy design process. We report a positive effect: individuals in buildings slated for redevelopment are more likely to agree that the government should reduce income differences between rich and poor, provide for the unemployed, and provide public housing. Our findings suggest that increased trust in the government is a channel through which program participation affects redistribution preferences, show how programs can be used strategically to promote a redistributive agenda, and suggest a pathway for the co-persistence of redistribution preferences and redistributive state policies.

Multiple regimes in the preferences for redistribution

AbstractThis paper provides novel evidence of nonlinearities in the formation of preferences for redistribution by uncovering evidence of multiple regimes consistent with the presence of multiple equilibria and multiple steady states. Using threshold regressions that account for the endogeneity of the threshold variable, countries are classified into three groups that share common characteristics. Finally, our analysis reveals substantial evidence of parameter heterogeneity in the coefficient estimates of threshold regressions.

A false divide? Providing information about inequality aligns preferences for redistribution between right- and left-wing voters

A false divide? Providing information about inequality aligns preferences for redistribution between right- and left-wing voters

Did low-income essential workers during COVID-19 increase public support for redistribution?

Previous studies have shown that America generally has a low level of support for redistribution, in large part due to racial prejudice, particularly toward the poor. The COVID-19 pandemic, however, has increased public attention to low-income workers’ essential roles in society. Has this increased attention to low-income workers promote public support for redistribution? This article examines how priming about low-income workers’ (1) essential roles and (2) race, shaped individuals’ redistributive preferences. Our findings demonstrate that an emphasis on essential workers increased appreciation of their contribution to society and support for pandemic-related benefits for these workers. However, it did not increase support for redistribution or welfare programmes in general. In addition, while we found negative effects of a Latino cue, particularly among white respondents, this effect weakened when information about workers’ work ethics and other attributes was provided. Our findings have implications for understanding public support of redistribution and communicating government social welfare programmes.

The Political Effects of Economic Inequality: Evidence from Hong Kong

AbstractEconomic inequality can have significant political-social impacts, leading to social unrest and other negative consequences. With a high level of economic inequality and a remarkably contentious society, Hong Kong offers an intriguing case for investigating the political consequence of economic inequality. Based on an original random sampling survey in 2017, this study examines the political effects of perceived economic inequality in Hong Kong from three perspectives, namely, its impacts on citizens’ preferences for redistribution, political autonomy, and social protests. This study yields several important findings. Citizens’ perceived economic inequality is positively correlated with support for government redistribution and support for political autonomy. However, perceived economic inequality is not associated with citizens’ propensity to join social protests. We find that political values and citizens’ identities influence their demand for political autonomy and propensity to join protests. Our study thus sheds fresh light on the effect of economic inequality on a developed economy.

Women’s voice on redistribution: From gender equality to equalizing taxation

We investigate the role played by gender equality in redistributive policies through taxation and in preferences for redistribution. First, at the cross-country level, we study how the historical roots of gender equality –i.e., the time of women’s enfranchisement and the role of women in the family– are related with the level of redistribution through taxation. We find that in countries that are historically more gender equal the tax system today is more redistributive. Second, at the individual level, in order to shed light on the cross-country evidence, we investigate whether gender equality is related with overall and/or gender-specific differences in preferences about redistribution. We find that in more gender-equal countries gender differences in redistributive preferences are significantly larger, while their average level does not vary: when gender equality is stronger, women are systematically more favorable to redistribution, whereas there are no significant changes for men. In turn, the component of gender equality driving this result is –not surprisingly– the equality of women and men within the political sphere.

Tax Decentralization, Preferences for Redistribution, and Regional Identities

Tax Decentralization, Preferences for Redistribution, and Regional Identities

Self–Serving Redistributive Preferences Among Natives and Immigrants in the UK

Self–Serving Redistributive Preferences Among Natives and Immigrants in the UK

The politics of redistribution and sovereign default

This paper studies how distributional and electoral concerns shape sovereign default incentives within a quantitative model of sovereign debt with heterogeneous agents and non-linear income taxation. The small open economy is characterized by a two-party system in which the left-wing party has a larger preference for redistribution than the right-wing party. Political turnover is the endogenous outcome of the electoral process. Fiscal policy faces a tradeoff: On the one hand, the government has incentives to finance its spending via external debt to avoid distortionary income taxation. On the other hand, the accumulation of external debt raises the cost of borrowing. Quantitative findings suggest that the left-wing party implements a more progressive income tax, is more prone to default, and has a lower electoral support than the right-wing party due to worse borrowing conditions and the distortionary effects of income taxation. In equilibrium, electoral uncertainty raises sovereign default risk.

Too Lucky To Be True: Fairness Views under the Shadow of Cheating

Abstract Income inequalities within societies are often associated with evidence that the rich are more likely to behave unethically and evade more taxes. We study how fairness views and preferences for redistribution are affected when cheating may, but need not, be the cause of income inequalities. In our experiment, we let third parties redistribute income between a rich and a poor stakeholder. In one treatment, income inequality was only due to luck, while in two others rich stakeholders might have cheated. The mere suspicion of cheating changes third parties' fairness views considerably and leads to a strong polarization that is even more pronounced when cheating generates negative externalities.

Perceived position on the social ladder and redistributive preferences – A survey experiment from the Kyrgyz Republic

Prior research has established that both perceived and actual inequality matter for redistributive preferences. Hence, misconceptions can alter public demand for government intervention. Survey experiments have found systematic biases in people's inequality perceptions and found that, in some contexts, the provision of correct information may alter their preferences for redistribution. This literature has, however, centered around high-income, Western nations. This paper uses an experimental survey design to understand the effect of perceived poverty and inequality on the preferences for redistribution in the Kyrgyz Republic. Using primary survey data collected from 2000 households, we first analyze the attitudes of different socio-economic groups towards the poor and the extent to which attitudes predict preferences for redistributive policies. Secondly, we focus on how the perceived socio-economic position influences support for redistribution. Finally, using an experimental survey design, we estimate the effect of correcting misconceptions about individuals' socio-economic position on the support for redistribution. We find that the relationships between poverty attitudes and demand for government redistribution is similar to a high-income, Western context. Overall, demand for redistribution remains robust to new information about the position in the income distribution. The correction of biased perceptions only altered stated preferences for people with specific already-held beliefs.

Social preferences, support for redistribution, and attitudes towards vulnerable groups

In this work, I explore the explanatory power of experimentally-elicited social preferences over self-reported support for redistribution. Social preferences are obtained by means of a simplified dictator game embedded in an online survey that also includes a questionnaire on preferences for redistribution, beliefs, inequality perceptions, and ideological positioning. I find that social preferences covary strongly with self-reported support for increased taxation. Besides, more generous social preference types are more likely to have favourable views towards specific welfare beneficiaries, especially those usually regarded as less deserving, such as migrants, the unemployed, or the poor. Some elements that correlate negatively with preferences for redistribution are being older than 65, having a right-wing ideology, believing that personal effort is the main driver of one’s economic position, and distrusting others; while being a parent or perceiving high inequality have the opposite effect. Social preferences help thus further understand public support for redistribution and the political feasibility of redistributive policies.