GINI DP 7: Income Distributions, Inequality Perceptions and Redistributive Claims in European Societies

In this paper we analyse how redistributive preference relates to actual income and to its distribution. For measuring the relationship on macro level, we defi ne distance based measures of income inequality (P-ratios, based on data from LIS) and test them for their direct and for their contextual effects on aggregate (country level) and on individual redistributive claims. For measuring redistributive preference we develop a composite index using available public opinion (Eurobarometer) data for the European Union member states. On macro level there is a continued and high support of state redistribution in many European countries but the cross-country variance is also high. Preferences for redistribution correspond to various aspects of inequality (most notably, to the extent and depth of relative poverty). On micro level the redistributive preference, while mostly derived from rational self interest (material position, labour market status, expected mobility), is also driven by general attitudes about the role of personal responsibility in one’s own fate and by general beliefs about causes of poverty and the like. While the affl uent, the middle and the poor have different appetite for redistribution everywhere, the distance between their attitudes also seems to be determined by the distance between their relative positions (ranks in the distribution). In countries having larger level of aggregate inequalities the general redistributive preference (of the rich, of the middle and of the poor) is higher, however in countries with very high levels of inequalities the difference in redistribution preference begins to decrease, which is a hint for a curvilinear relationship. The slope of this socioeconomic gradient seems, however, steeper in countries with middle inequality levels. The results of the paper can contribute to a refi nement of the predictions developed in the frame of the median voter theorem and, via this, to a better understanding of political processes. JEL Classification: D31, D63, H3