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In the Eye of the Beholder: Subjective Inequality Measures and the Demand for Redistribution

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Author Info
Andreas Kuhn () (Institute for Empirical Research in Economics, University of Zurich, Switzerland)
Abstract

This paper presents a simple conceptual framework intended for describing individuals’ subjective evaluations of occupational wage inequality and their demand for redistribution. Most importantly, the framework explicitly allows for the distinction between individuals’ perceptions and their normative beliefs. I illustrate the framework using Swiss survey data from the International Social Survey Program. While most individuals accept quite large wage differentials across occupations, they also prefer a lower level of overall wage inequality than what they perceive to exist. Consistent with previous evidence, the empirical analysis also shows that financial self-interest, social norms about distributive justice and perceptions of how wages are determined in reality all simultaneously influence the demand for redistribution. Finally, I show that subjective inequality measures and the demand for redistribution are substantially significant predictors of both individuals’ support for government intervention and their party identification. This result provides indirect evidence on the presumed link between perceptions and beliefs on the one hand and political outcomes on the other hand.

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Paper provided by The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria in its series NRN working papers with number 2009-14.

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Length: 60 pages
Date of creation: Aug 2009
Date of revision:
Handle: RePEc:jku:nrnwps:2009_14

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Related research
Keywords: Subjective inequality measures; demand for redistribution; distributive justice; party identification; support for the welfare state;

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Find related papers by JEL classification:
D3 - Microeconomics - - Distribution
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
H1 - Public Economics - - Structure and Scope of Government

This paper has been announced in the following NEP Reports:

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  2. Christina M. Fong & Samuel Bowles & Herbert Gintis, 2005. "Behavioural Motives for Income Redistribution," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 38(3), pages 285-297, 09. [Downloadable!] (restricted)
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  6. Piketty, Thomas, 1995. "Social Mobility and Redistributive Politics," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 551-84, August. [Downloadable!] (restricted)
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  7. Feld, Lars P. & Matsusaka, John G., 2003. "Budget referendums and government spending: evidence from Swiss cantons," Journal of Public Economics, Elsevier, vol. 87(12), pages 2703-2724, December. [Downloadable!] (restricted)
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  11. Sen, Amartya, 2000. "Social justice and the distribution of income," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 1, pages 59-85 Elsevier. [Downloadable!] (restricted)
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  13. van Praag, B. M. S. & Frijters, P. & Ferrer-i-Carbonell, A., 2003. "The anatomy of subjective well-being," Journal of Economic Behavior & Organization, Elsevier, vol. 51(1), pages 29-49, May. [Downloadable!] (restricted)
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  14. Ran Abramitzky, 2008. "The Limits of Equality: Insights from the Israeli Kibbutz," The Quarterly Journal of Economics, MIT Press, vol. 123(3), pages 1111-1159, August. [Downloadable!] (restricted)
  15. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-27, October. [Downloadable!] (restricted)
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  18. Roemer, John E., 1998. "Why the poor do not expropriate the rich: an old argument in new garb," Journal of Public Economics, Elsevier, vol. 70(3), pages 399-424, December. [Downloadable!] (restricted)
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  21. Rafael Di Tella & Robert J. MacCulloch, 2002. "The Determination of Unemployment Benefits," Journal of Labor Economics, University of Chicago Press, vol. 20(2), pages 404-403, Part. [Downloadable!]
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  22. James Konow, 2003. "Which Is the Fairest One of All? A Positive Analysis of Justice Theories," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1188-1239, December.
  23. Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2009-2042, August. [Downloadable!] (restricted)
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  24. Feld, Lars P. & Kirchgassner, Gebhard, 2000. "Direct democracy, political culture, and the outcome of economic policy: a report on the Swiss experience," European Journal of Political Economy, Elsevier, vol. 16(2), pages 287-306, June. [Downloadable!] (restricted)
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    Other versions:
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