The Subversive Nature of Inequality: Subjective Inequality Perceptions and Attitudes to Social Inequality

Andreas Kuhn ()
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Andreas Kuhn: Swiss Federal Institute for Vocational Education and Training

No 9406, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper shows that higher levels of perceived wage inequality are associated with a weaker (stronger) belief into meritocratic (non-meritocratic) principles as being important in determining individual wages. This finding is robust to the use of an instrumental-variable estimation strategy which takes the potential issue of reverse causality into account, and it is further corroborated using various complementary measures of individuals' perception of the chances and risks associated with an unequal distribution of economic resources, such as their perception of the chances of upward mobility. I finally show that those individuals perceiving a high level of wage inequality also tend to be more supportive of redistributive policies and progressive taxation, and that they tend to favor the political left, suggesting a feedback effect of inequality perceptions into the political-economic sphere. Taken together, these findings suggest that high levels of perceived wage inequality have the potential to undermine the legitimacy of market outcomes.

Keywords: inequality perceptions; attitudes to social inequality; support of redistribution; legitimacy of market outcomes; beliefs about the causes of economic success; political preferences (search for similar items in EconPapers)
JEL-codes: D31 D63 J31 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2015-10
New Economics Papers: this item is included in nep-hpe, nep-lma, nep-pbe and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published - revised and shortened version published in: European Journal of Political Economy, 2019, 59, 331-344

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