GINI DP 67: Preferences for Redistribution in Europe

Javier Olivera

GINI Discussion Papers from AIAS, Amsterdam Institute for Advanced Labour Studies

Abstract: This paper analyses the determinants of preferences for redistribution in a pool of 33 European countries over the period 2002-2010. We find that income inequality affects positively the individual demand for redistribution and that the actual level of redistribution implemented in the country decreases the support for more redistribution. Furthermore, a fixed effect model applied to pseudo panels constructed over that period confirms that increases in income inequality over time raise the demand for redistribution. This result is predicted by standard political economy models but has found little empirical support. We show that at least in Europe growing income inequality leads to more individual support for redistribution.

Date: 2013-08
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