Social Positions and Fairness Views on Inequality

Kristoffer B. Hvidberg, Claus Kreiner and Stefanie Stantcheva

No 28099, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We link survey data on Danish people's perceived income positions and fairness views on inequality within various reference groups to administrative records on their reference groups, income histories, and life events. People are, on average, well- informed about the income levels of their reference groups. Yet, lower-ranked respondents in all groups tend to overestimate their own position among others because they believe others' incomes are lower than is the case, while the opposite holds for higher- ranked respondents. Misperceptions of positions in reference groups relate to proximity to other individuals, transparency norms, and visible signals of income. People view inequalities within their co-workers and education groups as significantly more unfair than overall inequality, yet underestimate inequality the most exactly within these groups. Views on the fairness of inequalities are strongly correlated with an individual's current position, move with shocks like unemployment or promotions, and change when experimentally showing people their actual positions. However, the higher perceived unfairness of income differences within co-workers and education groups stays unchanged. The theoretical framework shows that this can have important implications for redistribution policy.

JEL-codes: D1 D63 D8 H20 H31 (search for similar items in EconPapers)
Date: 2020-11
Note: LS PE POL
References: Add references at CitEc
Citations: View citations in EconPapers (20)

Published as Kristoffer B Hvidberg & Claus T Kreiner & Stefanie Stantcheva, 2023. "Social Positions and Fairness Views on Inequality," Review of Economic Studies, vol 90(6), pages 3083-3118.

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Related works:
Journal Article: Social Positions and Fairness Views on Inequality (2023)
Working Paper: Social Position and Fairness Views on Inequality (2021)
Working Paper: Social Positions and Fairness Views on Inequality (2021)
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