IDEAS home Printed from https://ideas.repec.org/p/iaw/iawdip/81.html
   My bibliography  Save this paper

The Tradeoff between Redistribution and effort: Evidence from the Field and from the Lab

Author

Abstract

Building on a theoretical model we test the hypothesis that effort choices and preferences for redistribution are simultaneously determined. Using cross-country panel data from the World Value Survey, we find that it is important to model preferences for redistribution and effort choices simultaneously. While respondents with stronger preferences for redistribution tend to have smaller incentives to engage in effort, the reverse does not hold true. Using a lab experiment, we show that redistribution choices even increase in imposed effort.Those with higher ability are willing to help the needy if earning income becomes more difficult for everybody.

Suggested Citation

  • Claudia M. Buch & Christoph Engel, 2012. "The Tradeoff between Redistribution and effort: Evidence from the Field and from the Lab," IAW Discussion Papers 81, Institut für Angewandte Wirtschaftsforschung (IAW).
  • Handle: RePEc:iaw:iawdip:81
    as

    Download full text from publisher

    File URL: http://www.iaw.edu/RePEc/iaw/pdf/iaw_dp_81.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Sascha O. Becker & Ludger Woessmann, 2009. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," The Quarterly Journal of Economics, Oxford University Press, vol. 124(2), pages 531-596.
    2. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659 Elsevier.
    3. Stefan Traub & Tim Krieger, 2008. "Back to Bismarck? Shifting Preferences for Intragenerational Redistribution in OECD Pension Systems," LIS Working papers 485, LIS Cross-National Data Center in Luxembourg.
    4. Antonio Cabrales & Rosemarie Nagel & José Rodríguez Mora, 2012. "It is Hobbes, not Rousseau: an experiment on voting and redistribution," Experimental Economics, Springer;Economic Science Association, vol. 15(2), pages 278-308, June.
    5. Persson, Torsten & Tabellini, Guido, 1999. "Political economics and macroeconomic policy," Handbook of Macroeconomics,in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 22, pages 1397-1482 Elsevier.
    6. Checchi, Daniele & Filippin, Antonio, 2003. "An Experimental Study of the POUM Hypothesis," IZA Discussion Papers 912, Institute for the Study of Labor (IZA).
    7. James Konow, 2000. "Fair Shares: Accountability and Cognitive Dissonance in Allocation Decisions," American Economic Review, American Economic Association, vol. 90(4), pages 1072-1091, September.
    8. Alberto F. Alesina & Paola Giuliano, 2009. "Preferences for Redistribution," NBER Working Papers 14825, National Bureau of Economic Research, Inc.
    9. Selten, Reinhard & Ockenfels, Axel, 1998. "An experimental solidarity game," Journal of Economic Behavior & Organization, Elsevier, vol. 34(4), pages 517-539, March.
    10. Tyran, Jean-Robert & Sausgruber, Rupert, 2006. "A little fairness may induce a lot of redistribution in democracy," European Economic Review, Elsevier, vol. 50(2), pages 469-485, February.
    11. Fuchs-Schundeln, Nicola & Alesina, Alberto, 2007. "Good-Bye Lenin (Or Not?): The Effect of Communism on People's Preferences," Scholarly Articles 4553032, Harvard University Department of Economics.
    12. Schokkaert, Erik & Capeau, Bart, 1991. "Interindividual Differences in Opinions about Distributive Justice," Kyklos, Wiley Blackwell, vol. 44(3), pages 325-345.
    13. repec:cup:apsrev:v:84:y:1990:i:02:p:461-477_19 is not listed on IDEAS
    14. Frohlich, Norman & Oppenheimer, Joe A. & Eavey, Cheryl L., 1987. "Laboratory Results on Rawls's Distributive Justice," British Journal of Political Science, Cambridge University Press, vol. 17(01), pages 1-21, January.
    15. Kaisa Herne & Maria Suojanen, 2004. "The Role of Information in Choices Over Income Distributions," Journal of Conflict Resolution, Peace Science Society (International), vol. 48(2), pages 173-193, April.
    16. Fong, Christina, 2001. "Social preferences, self-interest, and the demand for redistribution," Journal of Public Economics, Elsevier, vol. 82(2), pages 225-246, November.
    17. Klor, Esteban F. & Shayo, Moses, 2010. "Social identity and preferences over redistribution," Journal of Public Economics, Elsevier, vol. 94(3-4), pages 269-278, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Effort; redistribution; World Value Survey; simultaneous equation models; experiment;

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iaw:iawdip:81. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Rolf Kleimann). General contact details of provider: http://edirc.repec.org/data/iawtude.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.