Are People Inequality Averse, and Do They Prefer Redistribution by the State? Evidence From German Longitudinal Data on Life Satisfaction
AbstractWe link life-satisfaction data to inequality of the pre-government income distribution at the regional level, to estimate the degree of inequality aversion. In addition, we investigate whether a reduction in inequality by the state increases individual well-being. We find that Germans are inequality averse over the entire income distribution. However, inequality reduction by the state does not increase well-being. On the contrary, inequality reduction places something of an excess burden on middle-income earners. The paper uses data from the German Socio-economic Panel Study (GSOEP) from 1985 to 1998.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 430.
Length: 31 pages
Date of creation: Feb 2002
Date of revision:
Publication status: published in: Journal of Socio-Economics, 2007, 36 (2), 233 - 249
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Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
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