Why does the amount of income redistribution differ between United States and Europe? The Janus face of Switzerland

Sule Akkoyunlu (), Ilja Neustadt and Peter Zweifel ()
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Sule Akkoyunlu: Socioeconomic Institute, University of Zurich
Peter Zweifel: Socioeconomic Institute, University of Zurich

No 810, SOI - Working Papers from Socioeconomic Institute - University of Zurich

Abstract: In this paper, the amount of income redistribution in the United States, the European Union, and Switzerland is compared and empirically related to economic, political, and behavioral determinants elaborated in the literature. Lying in between the two poles, Switzerland provides unique evidence about the relative merits of competing hypotheses. It tips the balance against the economic explanation, which predicts more rather than less income redistribution in the United States compared to the EU. It only weakly supports the political model linking proportional representation and multiparty structure (which also characterize Switzerland) to redistribution; yet the Swiss share of transfers in the GDP is low. Behavioral explanations receive a good deal of support from the case of Switzerland, a country that shares with the United States the belief that hard work rather than luck, birth, connections, and corruption determine wealth. In this way, the Janus face of Switzerland may help to explain the difference in the amount of U.S. and EU income redistribution.

Keywords: Redistribution; Income Mobility; Openness; Political Economy; Beliefs; Religion; Immigration (search for similar items in EconPapers)
JEL-codes: D31 D63 D64 H53 I31 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2008-09
New Economics Papers: this item is included in nep-eec, nep-ltv and nep-pol
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Citations: View citations in EconPapers (4)

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https://www.zora.uzh.ch/id/eprint/52397/1/wp0810.pdf revised version, 2009 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:soz:wpaper:0810

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