Working Paper: NBER ID: w21529
Authors: Vivek Inan Ashok; Ilyana Kuziemko; Ebonya Washington
Abstract: Despite the large increases in economic inequality since 1970, American survey respondents exhibit no increase in support for redistribution, in contrast to the predictions from standard theories of redistributive preferences. We replicate these results but further demonstrate substantial heterogeneity by demographic groups. In particular, the two groups who have most moved against income redistribution are the elderly and African-Americans. We find little evidence that these subgroup trends are explained by relative economic gains or growing cultural conservatism, two common explanations. We further show that the elderly trend is uniquely American, at least relative to other developed countries with comparable survey data. While we are unable to provide definitive evidence on the cause of these two groups' declining redistributive support, we offer additional correlations which may offer fruitful directions for future research on the topic. One story consistent with the data on elderly trends is that older Americans worry that redistribution will come at their expense, in particular via cuts to Medicare. We find that the elderly have grown increasingly opposed to government provision of health insurance and that controlling for this tendency explains about 40% of their declining support for redistribution. For blacks, controlling for their declining support of race-targeted aid explains nearly 45% of their differential decline in redistributive preferences (raising the question of why support for race-targeted aid has fallen during a period when black economic catch-up to whites has stalled).
Keywords: redistribution; inequality; elderly; African Americans; public opinion
JEL Codes: D63; H23; J14; J15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Elderly opposition to government health insurance (I18) | Decline in support for redistribution (D39) |
| Educational gains (I24) | Differential trend among the elderly (J14) |
| Views on race-targeted aid (J15) | Decline in support for redistribution among African Americans (J79) |
| Perceptions of fairness (D63) | Decline in support for redistribution (D39) |
| Fear of cuts to Medicare (I18) | Decline in support for redistribution among the elderly (J26) |
| Ideological conservatism (P16) | Decline in support for redistribution (D39) |