Minimum wage and tolerance for inequality

Andrea Fazio () and Tommaso Reggiani ()

MUNI ECON Working Papers from Masaryk University

Abstract: We suggest that people advocate for equality also because they fear income losses below a given reference point. Stabilizing their baseline income can make workers more tolerant of inequality. We present evidence of this attitude in the UK by exploiting the introduction of the National Minimum Wage (NMW), which institutionally set a baseline pay reducing the risk of income losses for British workers at the bottom of the income distribution. Based on data from the British Household Panel Survey, we show that workers that benefited from the NMW program became relatively more tolerant of inequality and more likely to vote for the Conservative party.

Keywords: Inequality; Redistribution; Minimum wage; Reference dependency; United Kingdom. (search for similar items in EconPapers)
JEL-codes: D63 D69 H10 H53 Z1 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2022-05, Revised 2023-02
New Economics Papers: this item is included in nep-eur
Note: License: CC BY-NC-ND 4.0
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Persistent link: https://EconPapers.repec.org/RePEc:mub:wpaper:2022-07

DOI: 10.5817/WP_MUNI_ECON_2022-07

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