Inequality of Opportunity and Income Redistribution

Marcel Preuss (mp2222@cornell.edu), Germán Reyes, Jason Somerville (jason.somerville@ny.frb.org) and Joy Wu (joy.wu@lmu.de)

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: We examine how redistribution decisions respond to the source of luck when there is uncertainty about its role in determining opportunities and outcomes. We elicit redistribution decisions from a representative U.S. sample who observe worker outcomes and whether luck could determine earnings directly (Şlucky outcomesŤ) or indirectly by providing one of the workers with a relative advantage (Şlucky opportunitiesŤ). We Ąnd that participants redistribute less and are less responsive to changes in the importance of luck in environments with lucky opportunities. We show that individuals rely on a simple heuristic when assessing the impact of unequal opportunities, which leads them to underappreciate the extent to which small differences in opportunities can have a large impact on outcomes. These Ąndings have implications for models of redistribution attitudes and help explain the gap between lab evidence on support for redistribution and inequality trends.

Keywords: Income inequality; demand for redistribution; fairness ideals (search for similar items in EconPapers)
JEL-codes: C91 D63 (search for similar items in EconPapers)
Pages: 68
Date: 2024-01
New Economics Papers: this item is included in nep-exp and nep-lma
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Inequality of Opportunity and Income Redistribution (2024)
Working Paper: Inequality of Opportunity and Income Redistribution (2023)
Working Paper: Inequality of Opportunity and Income Redistribution (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2024_491

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