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The redistributive consequences of segregation and misperceptions

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  • Windsteiger, Lisa

Abstract

In this paper I present a model in which an increase in income inequality can lead to a decrease in voters’ demand for redistribution. In my model, people sort into groups according to income and as a result they become biased about the shape of the income distribution. I demonstrate that an increase in inequality can lead to a decrease in perceived inequality in the presence of segregation, and hence to a fall in people’s support for redistribution.

Suggested Citation

  • Windsteiger, Lisa, 2022. "The redistributive consequences of segregation and misperceptions," European Economic Review, Elsevier, vol. 144(C).
    • Handle: RePEc:eee:eecrev:v:144:y:2022:i:c:s001429212200023x
    DOI: 10.1016/j.euroecorev.2022.104073
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    Cited by:

    1. Martinangeli, Andrea F.M. & Windsteiger, Lisa, 2023. "Immigration vs. poverty: Causal impact on demand for redistribution in a survey experiment," European Journal of Political Economy, Elsevier, vol. 78(C).
    2. Nicole Oetke & Maria Norkus & Jan Goebel, 2023. "Assessing the Effects of District-Level Segregation on Meritocratic Beliefs in Germany," Social Sciences, MDPI, vol. 12(7), pages 1-29, June.
    3. Licia Bobzien, 2023. "Income Inequality and Political Trust: Do Fairness Perceptions Matter?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 169(1), pages 505-528, September.
    4. Pirmin Fessler & Severin Rapp, 2023. "The subjective wealth distribution: How it arises and why it matters to inform policy? (Pirmin Fessler, Severin Rapp)," Working Papers 249, Oesterreichische Nationalbank (Austrian Central Bank).
    5. Yuki, Kazuhiro, 2023. "Social Identity, Redistribution, and Development," MPRA Paper 115965, University Library of Munich, Germany.

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    More about this item

    Keywords

    Personal income distribution; Inequality; Redistribution; Segregation; Misperceptions;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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