Sule Akkoyunlu () (Socioeconomic Institute, University of Zurich) Ilja Neustadt () (Socioeconomic Institute, University of Zurich) Peter Zweifel () (Socioeconomic Institute, University of Zurich)
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In this paper, the amount of income redistribution in the United States, the European Union, and Switzerland is compared and empirically related to economic, political, and behavioral determinants elaborated in the literature. Lying in between the two poles, Switzerland provides unique evidence about the relative merits of competing hypotheses. It tips the balance against the economic explanation, which predicts more rather than less income redistribution in the United States compared to the EU. It only weakly supports the political model linking proportional representation and multiparty structure (which also characterize Switzerland) to redistribution; yet the Swiss share of transfers in the GDP is low. Behavioral explanations receive a good deal of support from the case of Switzerland, a country that shares with the United States the belief that hard work rather than luck, birth, connections, and corruption determine wealth. In this way, the Janus face of Switzerland may help to explain the difference in the amount of U.S. and EU income redistribution.
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Paper provided by University of Zurich, Socioeconomic Institute in its series Working Papers with number
0810.
Find related papers by JEL classification: D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement D64 - Microeconomics - - Welfare Economics - - - Altruism H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
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