Inequality, Life Expectancy, and the Intragenerational Redistribution Puzzle - Some Experimental Evidence
Christine Meemann and
No 9677, CESifo Working Paper Series from CESifo
In most OECD countries, pension reform policy has decreased the level of intragenerational redistribution over the last three decades, that is, redistribution among members of the same generation with high and low pension entitlements. This trend has occurred despite heterogeneity in life expectancy linked to socioeconomic status having a regressive impact on out-comes. This paper contributes to solving this puzzle by means of a controlled laboratory experiment. We study the causal relationship between inequality of entitlements, mortality risk, and the size of redistribution in a stylized social security system. We ﬁnd that mortality risk, when negatively correlated with entitlements, signiﬁcantly lowers subjects’ willingness to redistribute payoﬀs from high-entitlement to low-entitlement subjects. We explain this ﬁnding with eﬃciency preferences and an alienation eﬀect. The alienation eﬀect is the tendency to attach a lower social weight to the short-lived poor.
Keywords: inequality; life expectancy; risk; redistribution; pension reform; efficiency preferences; alienation effect experiment (search for similar items in EconPapers)
JEL-codes: D63 D81 H55 I14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-dem and nep-exp
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Working Paper: Inequality, life expectancy, and the intragenerational redistribution puzzle: Some experimental evidence (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_9677
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