Income Inequality and Social Preferences for Redistribution and Compensation Di¤erentials
نویسنده
چکیده
In cross-sectional studies, countries with greater income inequality typically exhibit less support for government-led redistribution and greater acceptance of wage inequality (e.g., United States versus Western Europe). If individual nations evolve along this pattern, a vicious cycle could form with reduced social concern amplifying primal increases in inequality due to forces like skill-biased technical change. Exploring movements around these long-term levels, however, this study nds mixed evidence regarding the vicious cycle hypothesis. On one hand, larger compensation di¤erentials are accepted as inequality grows. This growth in di¤erentials is of a smaller magnitude than the actual increase in inequality, but it is nonetheless positive and substantial in size. Weighing against this, growth in inequality is met with greater support for government-led redistribution to the poor. These patterns suggest that short-run inequality shocks can be reinforced in the labor market but do not result in weaker political preferences for redistribution. JEL Classi cation: D31, D33, D61, D63, D64, D72, H23, H53, I38, J31, R11.
منابع مشابه
Income Inequality and Social Preferences for Redistribution and 1 Compensation Differentials
4 Countries with greater inequality typically exhibit less support for redistribution and greater 5 acceptance of inequality (e.g., US versus Western Europe). If individual nations evolve along this 6 pattern, a vicious cycle could form with reduced social concern amplifying primal increases in 7 inequality. Exploring movements around these long-term levels, however, this study finds mixed 8 ev...
متن کاملThe Inequality Deflator: *Interpersonal Comparisons without a Social Welfare Function
This paper develops a tractable method for resolving the equity-efficiency tradeoff that modifies the Kaldor-Hicks compensation principle to account for the distortionary cost of redistribution. Weighting measures of individual surplus by the inequality deflator corresponds to searching for local Pareto improvements by making transfers through the income tax schedule. Empirical evidence consist...
متن کاملAmericans’ Social Policy Preferences in the Era of Rising Inequality
Rising income inequality has been a defining trend of the past generation, yet we know little about its impact on social policy formation. We evaluate two dominant views about public opinion on rising inequality: that Americans do not care much about inequality of outcomes, and that a rise in inequality will lead to an increase in demand for government redistribution. Using time series data on ...
متن کاملAssignment, Hierarchies and Upper Tails
This paper examines whether changes in upper tails could explain increases in inequality in recent decades. First, methods are discussed that would determine the relative contributions of educational di¤erentials or variance of outcomes within educational levels to overall inequality. Preliminary analysis suggests that educational di¤erentials could not explain increases in inequality. The pape...
متن کاملDeviations from Pocketbook Voting in Income Redistribution: Evidence and Implications∗
This paper empirically investigates to what extent individuals vote with their pocketbooks in income redistribution. Survey data on preferences for redistribution show significant deviations from pocketbook voting in the poorest and the richest income groups. Differences in income status, education status, and other factors related to perceived social mobility cannot fully explain cross-country...
متن کامل