 Overestimation of social security payments reduces preferences for spending on social policyAlexei Zakharov European Journal of Political Economy, 2024, vol. 85, issue C Abstract: We test the fiscal illusion hypothesis, which concerns whether an awareness of the government’s costs and benefits is linked to preferences for redistribution and social policy. We conduct an N=2016 survey experiment in Russia—a country where many taxpayers are not aware of social security contributions that are paid by employers on their behalf. The treatment consists of a video with a calculation of the total amount of taxes and social security contributions that typically arise from an individual’s salary. We show that for individuals who initially overestimated these payments, information provision increases preferences for redistribution, while overall, the awareness of these payments reduces preferences for state spending, possibly due to reduced trust in the government and lower satisfaction with state-provided services. This is consistent with the explanation that new information about taxes and social security contributions signals a low state quality. These results persist in a follow-up survey given six weeks later. Keywords: Information provision; Preferences for redistribution; Survey experiment; Tax salience; Fiscal illusion (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:85:y:2024:i:c:s0176268024000594 DOI: 10.1016/j.ejpoleco.2024.102557 Access Statistics for this article European Journal of Political Economy is currently edited by J. De Haan, A. L. Hillman and H. W. Ursprung More articles in European Journal of Political Economy from Elsevier |
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