Determinants of Governmental Redistribution: Income Distribution, Development Levels, and the Role of Perceptions

Sebastian Köllner and Klaus Gründler ()

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: We empirically investigate the relationship between income inequality and redistribution, accounting for the shape of the income distribution, different development levels, and subjective perceptions. Cross-national inequality datasets that have become available only recently allow for the assessment of the link for various sample compositions and several model specifications. Our results confirm the Meltzer-Richard hypothesis, but suggest that the relation between market inequality and redistribution is even stronger when using perceived inequality measures. The findings emphasize a decisive role of the middle class, though also approving a negative impact of top incomes. The Meltzer-Richard effect is less pronounced in developing economies with less sophisticated political rights, illustrating that it is the political channel through which higher inequality translates into more redistribution.

JEL-codes: C23 D31 H11 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-ltv and nep-pbe
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Related works:
Journal Article: Determinants of governmental redistribution: Income distribution, development levels, and the role of perceptions (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc16:145619

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