Perceptions of Equity and the Distribution of Income

Julio Rotemberg

No 5624, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper builds a simple model where there is a link between employees' perception of the fairness of employers and the actual distribution of income. Wages are based in part on employers' assessments of the productivity of individual employees. I show that the equilibrium distribution of income depends on the beliefs of employees concerning the accuracy of these evaluations. I give conditions under which the distribution of income across employees of the same vintage is more equal if employees believe that these evaluations are generally inaccurate (so that they are skeptical of capitalists in general) than when they believe that these evaluations are accurate. The model is consistent with the fact that, in a sample of seven countries, the distribution of income is more unequal in countries where people feel that income inequality is not too large.

JEL-codes: D63 (search for similar items in EconPapers)
Date: 1996-06
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published as Rotemberg, Julio J. "Perceptions Of Equity And The Distribution Of Income," Journal of Labor Economics, 2002, v20(2,Apr), Part 1, 249-288.

Downloads: (external link)
http://www.nber.org/papers/w5624.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:5624

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w5624

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().