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Financial Literacy and Attitudes to Redistribution

Listed author(s):
  • Montagnoli, Alberto

    ()

    (University of Sheffield)

  • Moro, Mirko

    ()

    (University of Stirling)

  • Panos, Georgios A.

    ()

    (University of Glasgow)

  • Wright, Robert E.

    ()

    (University of Strathclyde)

This study combines novel financial-literacy data with measures of attitudes to redistribution from the British Election Study. We find a significant negative relationship between financial literacy and attitudes in favour of government intervention for income redistribution. The effect is robust to several specifications, samples, longitudinal models and instrumental variable regressions. Falsification tests show that these results are independent of generic attitudes towards other types of inequality/discrimination, e.g. based on gender, race or sexual orientation. An inquiry into the mechanisms of the effect indicates that the homo oeconomicus effect does not exert an impact on attitudes to redistribution for the less financially literate.

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File URL: http://ftp.iza.org/dp10633.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 10633.

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Length: 60 pages
Date of creation: Mar 2017
Handle: RePEc:iza:izadps:dp10633
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