Working Paper: CEPR ID: DP16638
Authors: Stefanie Stantcheva
Abstract: The relationship between the degree of inequality and the demand for redistribution has been a central question in political science and political economy. The famous median-voter model predicts that higher inequality, reflected in a growing gap between the income of the average and the median voter, should lead to increased demand for redistribution, as policymakers cater to the median voter’s preferences (Meltzer and Richard, 1981). Yet, using data from OECD countries, Kenworthy and McCall (2008) show that, despite increases in inequality in those countries, there was no corresponding increase in demand for redistribution. Part of the explanation of this puzzle lies in the realization that it is not only (or even mainly) reality, but perceptions that shape support for policy. This article will explore recent evidence using large-scale social economics surveys and experiments that sheds lights on beliefs about inequality, social mobility, diversity and immigration, social position, and understanding of how policies work.
Keywords: redistribution; fairness; immigrants; mobility; survey experiments; beliefs
JEL Codes: H2; P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| actual inequality (D31) | support for redistribution (H23) |
| misperceptions about income distribution (D31) | policy preferences (D72) |
| trust in government (H10) | support for redistribution (H23) |
| perceptions of immigration (K37) | support for redistribution (H23) |
| misunderstandings about tax policies (H26) | views on taxation and redistribution (H29) |
| perceptions of inequality (D63) | support for redistribution (H23) |
| perceptions of social mobility (J62) | support for redistribution (H23) |
| pessimistic information about social mobility (J62) | support for redistribution (H23) |