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The importance of the future when deciding levels of personal responsibility and demand for redistribution

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  • Beraldo, Sergio
  • Piacenza, Massimiliano
  • Turati, Gilberto

Abstract

We experimentally investigate the link between individuals' value on future incomes and their support for redistributive policies today. The investigation identifies time preferences as a key driver of redistributive policies via their effect on personal responsibility, defined as costly but productive effort. The investigation also accounts for the strategic interplay between individuals in the choice of effort, identifying two key strategies: either exercise more effort and ask for less redistribution or free ride on others’ efforts, asking for more redistribution. We find that individuals oriented toward the future tend to invest more and ask for less redistribution. We discuss the policy implications of this result.

Suggested Citation

  • Beraldo, Sergio & Piacenza, Massimiliano & Turati, Gilberto, 2022. "The importance of the future when deciding levels of personal responsibility and demand for redistribution," Economic Modelling, Elsevier, vol. 116(C).
    • Handle: RePEc:eee:ecmode:v:116:y:2022:i:c:s0264999322002280
    DOI: 10.1016/j.econmod.2022.105982
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    More about this item

    Keywords

    Income redistribution; Proportional income tax; Personal responsibility; Intertemporal preferences;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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