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Intergenerational Earnings Mobility and Preferences for Redistribution

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  • Siedler, Thomas

    ()
    (University of Hamburg)

  • Sonnenberg, Bettina

    ()
    (DIW Berlin)

Abstract

This paper analyzes the extent to which intergenerational upward and downward mobility in earnings are related to individuals' preferences for redistribution. A novel survey question from the German Socio-Economic Panel Study – whether the taxes paid by unskilled workers are too high, adequate or too low – are used to elicit attitudes toward redistribution. Intergenerational mobility with regard to long-term earnings is measured using a rich panel data spanning an observation window of 22 years. The results reveal that intergenerational mobility is significantly related to preferences for redistribution. The empirical results yield strong and robust support for Piketty's (1995) rational-learning theory: individuals who experience upward (downward) intergenerational mobility are less (more) likely to favor redistribution taxation policies.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6981.

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Length: 34 pages
Date of creation: Nov 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6981

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Keywords: preferences for redistribution; intergenerational mobility; long-run earnings; panel data;

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  1. Intergenerational Earnings Mobility and Preferences for Redistribution
    by maximorossi in NEP-LTV blog on 2012-12-05 13:51:50

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