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Spend It Like Beckham? Inequality and Redistribution in the UK, 1983-2004

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  • Andreas Georgiadis
  • Alan Manning

Abstract

A main activity of the state is to redistribute resources. Models of the political process generally predict that a rise in inequality will lead to more redistribution. This paper shows that, for the UK in the period 1983-2004, a plausibly exogenous rise in income inequality has not been associated with increased redistribution. We then explore this further using attitudinal data. We show that the demand for redistribution, having shown considerable variation over time, is at an all-time low. We argue that the decline in the demand for redistribution can mostly be accounted for by an increasing belief in the importance of incentives though changes in preferences over the distribution of income have been important in some sub-periods.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0816.

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Date of creation: Aug 2007
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Handle: RePEc:cep:cepdps:dp0816

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Keywords: Taxation; Inequality; Redistribution;

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Cited by:
  1. Javier Olivera, 2012. "Preferences for Redistribution in Europe," Working Papers, Geary Institute, University College Dublin 201225, Geary Institute, University College Dublin.
  2. SCHOKKAERT, Erik & TRUYTS, Tom, 2014. "Preferences for redistribution and social structure," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2014001, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Bethencourt, Carlos & Kunze, Lars, 2013. "The political economics of redistribution, inequality and tax avoidance," MPRA Paper 51127, University Library of Munich, Germany.
  4. Javier Olivera, 2014. "Preferences for redistribution after the economic crisis," Working Papers 334, ECINEQ, Society for the Study of Economic Inequality.
  5. Christian Bredemeier, 2010. "Imperfect Information and the Meltzer-Richard Hypothesis," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0213, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  6. Carina Engelhardt & Andreas Wagener, 2014. "Biased Perceptions of Income Inequality and Redistribution," CESifo Working Paper Series 4838, CESifo Group Munich.

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