Redistributive Policies Research Articles

Relatively accurate but absolutely off: U.S. residents’ estimates of relative and absolute economic mobility

ABSTRACT Using results from two treatment arms of a larger nationwide survey experiment in the United States, we add evidence on how Americans perceive social mobility. In one arm, respondents estimate both upward and downward relative economic mobility, while in the other, respondents estimate the absolute economic mobility (that is, do children out-earn their parents?) for each quintile of the parental income distribution. This latter question has been overlooked in the literature. We find respondentsʻ average estimates of relative downward mobility to be remarkably close to reality. The average estimate of relative upward mobility is also close, though both estimates underestimate relative mobility. There are small partisan differences in accuracy on relative mobility, with Republican-leaning respondents providing the most accurate estimates, but respondentsʻ perception of absolute mobility significantly underestimate (overestimate) mobility for the poorest (highest-income) children irrespective of partisan affiliation. Our results provide important insights on the implementation of redistribution policies.

Stagnating incomes and preferences for redistribution: The role of absolute and relative experiences

AbstractStagnating incomes have been a widespread concern in advanced democracies over the past decades. However, despite a turn towards dynamic frameworks, the consequences of stagnation on political support for the welfare state are still unclear. This study introduces the distinction between ‘absolute’ and ‘relative’ income stagnation – that is, experiencing stagnating incomes over time (without reference to other groups) and in relative comparison to other groups – and explores how they shape citizens’ attitudes towards redistribution. I argue that absolute and relative stagnation have opposite effects on redistributive preferences. Contrary to political economy theories, I expect that low absolute income growth reduces demand for redistribution, because it reduces voters’ ability and willingness to afford welfare state policies. Support for this hypothesis is provided in an empirical analysis that combines novel estimates for absolute and relative income stagnation with longitudinal survey data on redistribution preferences in 14 advanced democracies between 1985 and 2018. The distinction between absolute and relative experiences has broader implications for comparative politics research and might contribute to explain why income stagnation and rising inequality have not led to higher political demand for redistributive welfare policy.

What Shapes Satisfaction with Democracy? Interests, Morals, and the German East–West Divide

Thirty years after reunification, East and West Germany are still characterized by a considerable difference in satisfaction with democracy (SWD). This paper proposes and tests a model which assumes SWD to be shaped by the interests (economic and cultural) and moral values individuals demand to see fostered by the democratic system. Empirical application of the model reveals substantial differences between the East and West German SWD function in that the satisfaction of economic interests is much more important in the East than the West whereas the opposite applies to moral concerns. Demands on redistribution and immigration policies—conceptualized as proximate drivers of SWD—also shape SWD differently in the East and the West, in addition to being shaped by interests and morals in different ways. East–West differences in the relationship between economic demands and SWD are more important than differences in the levels of demand.

Social Interaction, Envy, and the Basic Income: Do Remedies to Technological Unemployment Reduce Well-being?

AbstractThe present article aims to utilize some insights from behavioral and happiness economics to discuss the consequences that the introduction of an unconditional basic income to cope with technological unemployment may hold for well-being. The impact of 21st-century technological progress on employment has only just begun to make itself felt and it will take time to realize its full extent. However, the main innovation is already common knowledge: robots (and artificial intelligence) are finding their way into the production process. According to several recent (although controversial) contributions, the phenomenon is radically different from past technological revolutions and could generate high levels of unemployment, calling for innovative redistributive public policies. The present article, building on Keynes’ (1930) short essay (“Economic Possibilities for Our Grandchildren”) and referring to some of the principles and models of behavioral and happiness economics, focuses on the best-known of these policies, namely provision of an unconditional basic income. A series of factors – loss aversion and hedonic adaptation, the impossibility of escalating to higher-grade consumption behaviors, social interaction in the form of active and passive envy, loss of self-esteem and social stigma – are all likely to have a negative impact on well-being if an unconditional basic income that remains unchanging over time is implemented. A policy mix combining a rising basic income with other measures is therefore proposed.

Inequality and the 2019 Presidential Election in Indonesia: Beyond Identity Politics

This study intends to understand vote based on economic evaluationat the 2019 presidential election in which Joko Widodo wasincumbent, and Prabowo was the challenger. This paper arguesthat the presidential election in 2019 is a political arena wherethe voters assess the incumbent government’s economic policies, oneof which is redistributive. Redistributive policies are understood asgovernment policies intended to reduce the gap between the rich andpoor people or inequality. This empirical study uses merged data fromBPS, Bappenas, and the KPU. By employing a unique dataset, theoriginality of this study is located on the relevance of redistributivepolicies in political contestation. This study estimates the outcomeof the presidential election using the ordinary least square (OLS)method. It points out that reducing inequality at the district levelinfluenced the presidential election result. This paper stresses thatthe capability of the government to reduce inequality determines theresult of the election.How to Cite:Prasetyawan, W. (2022). Inequality and the 2019 Presidential Election in Indonesia: Beyond Identitiy Politics. Signifikan: Jurnal Ilmu Ekonomi, 11(1), 1-16. https://doi.org/10.15408/sjie.v11i1.22540.

Expecting equality or efficiency? A factorial survey on the justice perception of regional redistributive policies

ABSTRACT This paper analyses when the German public perceives the impacts of redistributive place-based policies as more just. Using a factorial survey, we experimentally vary recipient regions and the corresponding funding impacts for the overall state. The results show that strong absolute improvements in economy and living conditions in the whole state lead to significantly higher justice ratings of the hypothetical policy measure. Furthermore, the reduction of state-wide inequality leads to a significant increase in justice ratings, but only when living conditions are affected. Our results indicate that respondents want regional policy measures that provide equal access to public infrastructure for all regions and only target the economy if it promises lasting growth.

Social identity and economic inequalities

ABSTRACT Neoclassical economists explain social phenomena in the decision-making process with the rational and prudent agent, seeking the highest amount of personal utility with her idiosyncratic preferences. However, atomistic choices and preferences cannot explain the phenomena, such as unequal living conditions and discrimination in labor. The agent, as a human being, is always in interaction with the social environment. Social identity is one of the areas in which the social environment is influential. Social identities are associated with social inequalities, directed by some practices, attitudes and institutions that negatively affect the life prospects of social groups of different identities. Therefore, economists need the social unifying analytical concepts, such as social identity, to comprehend the inequalities and related issues, such as redistribution policies in societies.

GENDER AND EQUALITY IN LATIN AMERICA-CARIBBEAN; EVOLUTION 2006-2021. STRATEGIC RECOMMENDATIONS.

Gender economic equality in Latin America-Caribbean is behind Sub-Saharan region, limiting regional competitiveness and social justice. We found a negative regional correlation between women political empowerment and economic participation, being this associated to economic growth, democracy index and wage equality. We recommend authorities to focus on women economic participation, potentiate fiscal redistribution policies, improve democracy, governance and competitiveness, changing from one sex (women) to gender (social) policies for equality, reduction of voluntary education segregation with early age education intervention and support family and care to alleviate the social charges associates to being woman.

Why do political parties promote participatory governance? The Brazilian Workers’ Party case

ABSTRACT This article presents the motivations incumbent parties may have to create and promote participatory governance innovations. For that I analyze the case of the Brazilian Workers’ Party (PT – Partido dos Trabalhadores). I argue that the promotion of participatory governance by PT is a combination of ideological and pragmatic interests. Ideologically, PT is founded by grassroots social movements with a strong commitment to participation and redistributive policies. On the pragmatic side, the multiplication of State–Society interaction channels strengths the party’s social governability, that is civil society organizations support, creating pressure and mobilization towards the parliament to approve the party’s political agenda. This relationship may be mutually beneficial to civil society as long as there are similar policy preferences. The analysis is based on in-depth process tracing, which compares PT’s administrations in two different government levels: the State of Rio Grande do Sul and the Brazilian Federal Government.

On the ambivalence of preferences for income redistribution: A research note

Increased income inequality, and policies that can limit its further growth, are an important issue for citizens, politicians and the media. Numerous empirical studies have measured political support for redistributive policies by asking whether the government should equalize gaps between rich and poor. They try to discover whether ‘redistributive’ policies are supported by public opinion and are therefore politically feasible. This research note argues that the standard instrument measures diffuse support for more equality, but gives rather vague hints if this support is transformed into a political mandate for redistributive programmes. With regard to the way in which the political demand for state redistribution to reduce income inequality has been raised so far, methodological critique and innovation is largely lacking. This article therefore tests the validity of the standard item. It argues that the conventional measurement only captures a general ‘inclination’ towards the idea of equality. However, since the item phrasing is unspecific, other orientations confound the answers, so that ultimately the predictive power in terms of political behaviour is low. The standard item measures egalitarian preferences with inconsistence. This limits its reliability, so that hardly any conclusions can be drawn regarding voting for left parties or support for redistributive programmes.

Pragmatic coexistence: local responses to the state intrusion in Dersim during the early Republican period of Turkey (1938–1950)

This article examines state building in Dersim with reference to local demands and the state capacity. It first analyzes how the Turkish nationalists aimed to transform the Dersim region. The focus then shifts to the local responses towards the state policies following the military operations of 1937 and 1938. I posit that the Kurds’ relation with the state relied on pragmatism and negotiation rather than outright hostility. Moreover, I demonstrate that the locals’ expectations from the state overlapped with the Turkish state’s pre-operation agenda for the most part. Despite the local endorsement, the limited state capacity constituted a major obstacle in implementing land redistribution policy and expanding road networks with limited progress. The opening of schools, however, produced somewhat mixed results in the sense that the enrollment rates did not correspond to the increase in the number of schools.

Political Trust and Policy Demand in Changing Welfare States: Building Normative Support and Easing Reform Acceptance?

AbstractHow does generalized political trust affect policy demand in changing welfare states? We simultaneously consider two possible effects. First, trust may buttress normative support, as measured by well-known items on general support for redistribution and ‘government responsibility’ in specific areas. Secondly, political trust may ease concrete reform acceptance in the context of fiscal pressure. This proposition becomes increasingly relevant as welfare states change in ways not directly addressed by traditional survey measures. We develop hypotheses about how different dimensions of normative support and reform acceptance may be unequally affected by political trust. We analyse primary three-wave panel data in a field dominated by cross-sectional analysis. The data offer standard measures of trust and support, and a new multidimensional question battery tapping reform acceptance. We find cross-sectional and longitudinal support for hypotheses predicting that political trust buttresses normative support for horizontally redistributive policies (but as hypothesized not for ‘life-course’ policies). In contrast, there is quite some cross-sectional but little longitudinal support for effects on reform acceptance. Possible exceptions involve some of the more contentious reform types and, in particular, reforms that raise user fees and taxation.

Gender preference gaps and voting for redistribution

There is substantial evidence that women tend to support different policies and political candidates than men. Many studies also document gender differences in a variety of important preference dimensions, such as risk-taking, competition and pro-sociality. However, the degree to which differential voting by men and women is related to these gaps in more basic preferences requires an improved understanding. We conduct an experiment in which individuals in small laboratory “societies” repeatedly vote for redistribution policies and engage in production. We find that women vote for more egalitarian redistribution and that this difference persists with experience and in environments with varying degrees of risk. This gender voting gap is accounted for partly by both gender gaps in preferences and by expectations regarding economic circumstances. However, including both these controls in a regression analysis indicates that the latter is the primary driving force. We also observe policy differences between male- and female-controlled groups, though these are substantially smaller than the mean individual differences—a natural consequence of the aggregation of individual preferences into collective outcomes.

Other-Regarding Preferences and Redistributive Politics

Increasing inequality and associated egalitarian sentiments have again put redistribution on the political agenda. Support for redistribution may also be affected by altruistic and egalitarian preferences, but knowledge about the distribution of these preferences in the broader population and how they relate to political support for redistributive policies is still scarce. In this paper, we take advantage of Swiss direct democracy, where people voted several times in national plebiscites on strongly redistributive policies, to study the link between other-regarding preferences and support for redistribution in a broad sample of the Swiss population. Based on a recently developed non-parametric clustering procedure, we identify three disjunct groups of individuals with fundamentally different other-regarding preferences: (i) a large share of inequality averse people, (ii) a somewhat smaller yet still large share of people with an altruistic concern for social welfare and the worse off, and (iii) a considerable minority of primarily selfish individuals. Controlling for a large number of determinants of support for redistribution, we document that inequality aversion and altruistic concerns play an important role for redistributive voting that is particularly pronounced for above-median income earners. However, the role of these motives differs depending on the nature of redistributive proposals. Inequality aversion has large and robust effects in plebiscites that demand income reductions for the rich, while altruistic concerns play no significant role in these plebiscites.

Redistributive Policy and Redistribution Preferences: The Effects of Moscow Redevelopment Program

Redistributive Policy and Redistribution Preferences: The Effects of Moscow Redevelopment Program

Redistribution Policy and Social Welfare: A View from Macroeconomics

Redistribution Policy and Social Welfare: A View from Macroeconomics

Redistributive Policies and Migrants’ Labor Market Choices

Redistributive Policies and Migrants’ Labor Market Choices

Macroeconomic Conditions and Redistributive Policies as Determinants of Support for the Chávez Administration: A Case for Discussion about How (Much) World Capitalism Determines Latin American Politics

Macroeconomic Conditions and Redistributive Policies as Determinants of Support for the Chávez Administration: A Case for Discussion about How (Much) World Capitalism Determines Latin American Politics

Taxation, Inequality, and Poverty: Evidence from Ukraine

Abstract The aim of the article is to assess the impact of taxes on poverty and inequality in Ukraine and provide recommendations on how taxation should be used to address problems of inequality and poverty. The research methodology is based on a combination of linear regression and commitment to equity (CEQ) methodology, which was designed by Lustig to analyse the impact of taxation and social spending on inequality and poverty in individual countries. The dataset consists of data from the World Inequality Data Base and data from State Statistic Service of Ukraine. The analysis shows that income tax reform in Ukraine should not take place in the context of changing tax rates and tax periods but in the context of shifting the tax burden from the poor to the rich and preventing aggressive tax planning. Also, the results of the analysis show that the Ukrainian government’s policy of reducing free education and health services may contribute to poverty if the government does not change its redistributive policies. The article contributes to the academic literature on the impact of taxation on poverty and inequality in developing countries. The practical results obtained in the paper are useful for developing countries’ governments to design poverty- and inequality-sensitive tax policies.

Конвергенция неравенства доходов в российских регионах

In this paper we test convergence of income inequality in Russia’s regions for the period 1995–2020. To do this, conditional and unconditional beta convergence models for the regional Gini index are evaluated on cross-sectional and panel data using time and spatial effects. Estimates of the models show that both conditional and unconditional convergence of income inequality takes place in Russia’s regions. It is shown that the rate of convergence varies significantly within the considered period: the levels of income inequality in the regions converged most strongly at the beginning of the period with a gradual slowdown in the rate of convergence in subsequent periods. This result may be related to the recovery growth and redistribution policy in the 2000s, as well as the consequences of the 2014 crisis. The use of the same initial characteristics, such as GRP per capita, level of education and population, accelerates convergence. Spatial effects are statistically significant for models of unconditional, but not conditional convergence, but do not affect the estimates obtained. When considering a panel data structure with the inclusion of fixed time effects, convergence estimates increase for both unconditional and conditional convergence