Unfair Inequality and the Demand for Redistribution

Leo Ahrens ()

No 771, LIS Working papers from LIS Cross-National Data Center in Luxembourg

Abstract: Political economy research commonly expects a positive relationship between income inequality and the demand for redistribution, which is increasingly attributed to inequality aversion grounded in norms and values. However, people are not averse to a proportion of inequality that fairly results from differences in individual merit. Therefore, this study argues that the effect of inequality crucially depends on the extent to which income fairness is realized. It is primarily unfair inequality, rather than overall inequality, that affects individual redistribution support. The argument is substantiated with an empirical quantification of unfair inequality that measures whether individuals have unequal returns to their labor-related merits. Multilevel models using repeated cross-sections show that this quantification of unfair inequality can explain both within- and between-country variance in redistribution preferences and that it is a better predictor than overall inequality. The results suggest that public opinion cannot be inferred directly from the overall level of inequality.

Pages: 32 pages
Date: 2020-10
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Citations: View citations in EconPapers (3)

Published in Socio-Economic Review, (2020). https://doi.org/10.1093/ser/mwaa051

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Persistent link: https://EconPapers.repec.org/RePEc:lis:liswps:771

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