Intergenerational Earnings Mobility and Preferences for Redistribution

Thomas Siedler () and Bettina Sonnenberg ()
Additional contact information
Thomas Siedler: University of Potsdam
Bettina Sonnenberg: DIW Berlin

No 6981, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper analyzes the extent to which intergenerational upward and downward mobility in earnings are related to individuals' preferences for redistribution. A novel survey question from the German Socio-Economic Panel Study – whether the taxes paid by unskilled workers are too high, adequate or too low – are used to elicit attitudes toward redistribution. Intergenerational mobility with regard to long-term earnings is measured using a rich panel data spanning an observation window of 22 years. The results reveal that intergenerational mobility is significantly related to preferences for redistribution. The empirical results yield strong and robust support for Piketty's (1995) rational-learning theory: individuals who experience upward (downward) intergenerational mobility are less (more) likely to favor redistribution taxation policies.

Keywords: preferences for redistribution; intergenerational mobility; long-run earnings; panel data (search for similar items in EconPapers)
JEL-codes: H23 J62 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2012-11
New Economics Papers: this item is included in nep-lab and nep-ltv
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Citations: View citations in EconPapers (3)

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Working Paper: Intergenerational Earnings Mobility and Preferences for Redistribution (2012)
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