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Preferences for Redistribution in the Land of Opportunities

  • Alberto Alesina
  • Eliana La Ferrara

The poor favor redistribution and the rich oppose it, but that is not all. The "prospect of upward mobility" (POUM) hypothesis implies that social mobility may make some of today's poor into tomorrow's rich and since redistributive policies do not change often, individual preferences for redistribution should depend on the extent and the nature of social mobility. We estimate the determinants of preferences for redistribution using individual level data from the US, and we find that individual support for redistribution is negatively affected by the likelihood of moving above mean income relative to moving below the mean. Furthermore, people who believe that the American society offers equal opportunities to all oppose redistribution; instead those who do not believe that equal opportunities really exist and, therefore, regard the upward mobility process as biased, do not see social mobility as an alternative to redistributive policies.

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Paper provided by IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University in its series Working Papers with number 178.

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