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In the Eye of the Beholder: Subjective Inequality Measures and the Demand for Redistribution

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  • Kuhn, Andreas

    () (Swiss Federal Institute for Vocational Education and Training)

Abstract

This paper presents a simple conceptual framework intended for describing individuals' subjective evaluations of occupational wage inequality and their demand for redistribution. Most importantly, the framework explicitly allows for the distinction between individuals' perceptions and their normative beliefs. I illustrate the framework using Swiss survey data from the International Social Survey Program. While most individuals accept quite large wage differentials across occupations, they also prefer a lower level of overall wage inequality than what they perceive to exist. Consistent with previous evidence, the empirical analysis also shows that financial self-interest, social norms about distributive justice and perceptions of how wages are determined in reality all simultaneously influence the demand for redistribution. Finally, I show that subjective inequality measures and the demand for redistribution are substantially significant predictors of both individuals' support for government intervention and their party identification. This result provides indirect evidence on the presumed link between perceptions and beliefs on the one hand and political outcomes on the other hand.

Suggested Citation

  • Kuhn, Andreas, 2009. "In the Eye of the Beholder: Subjective Inequality Measures and the Demand for Redistribution," IZA Discussion Papers 4360, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4360
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    Cited by:

    1. Malte Luebker, 2014. "Income Inequality, Redistribution, and Poverty: Contrasting Rational Choice and Behavioral Perspectives," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(1), pages 133-154, March.

    More about this item

    Keywords

    subjective inequality measures; support for the welfare state; party identification; distributive justice; demand for redistribution;

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H1 - Public Economics - - Structure and Scope of Government

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