Research in brief: How our attitudes towards inequality drive support for redistribution
10/29/2024
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As income inequality within many countries rises, discussions about redistribution policies become increasingly prominent. A new study* by researchers from IÉSEG/CNRS, the University of Zurich and University of Copenhagen highlights that support for such policies is influenced not only by personal financial circumstances but also by how individuals feel about inequality itself.
Aversion to inequality & predicting support from the public
According to the UN, more than 70% of the world’s population live in countries where inequality has grown. Since 1990, income inequality has increased in most developed countries and in some middle-income countries, including China and India.
Contrary to traditional economic theories that suggest people only consider their own income when evaluating redistribution, this new study emphasizes the significance of people’s aversion to inequality. By factoring in this dislike, researchers can better predict which people are more likely to back policies aimed at narrowing income disparities.
The study identifies two forms of inequality aversion: “disadvantageous inequality,” where individuals resent being worse off than others, and “advantageous inequality,” where they dislike the existence of poorer individuals. This aversion varies among individuals, impacting their political support for income redistribution in complex ways.
An experiment with 9,000 Danish adults
Analyzing nearly 9,000 Danish participants aged 20 to 64, the researchers assessed individuals’ inequality aversion through behavioral experiments and relate these findings with their support for government-enforced income redistribution (for example policies such as changes in income tax regimes) and real life donations to charities.
“The results indicate that those who strongly oppose both forms of inequality are more likely to support political redistribution of income,” explains Thomas EPPER, a researcher at IÉSEG /CNRS. “Interestingly, however, we also found that attitudes toward charitable donations differ. Those who strongly oppose advantageous inequality tend to be more generous when donating, while those who dislike disadvantageous inequality are less likely to contribute to charities”.
Overall, this research reinforces the notion that people’s feelings about inequality significantly shape their economic and political behaviors, shedding light on the complexities behind support for redistribution policies.
”We believe this research can be very useful for policymakers and those involved in national debates, such as in France and other European countries. It will help provide them with insights on how they can predict the likelihood of gaining support for policies that seek to combat or redress income inequality”.
The researchers now plan to further investigate the determinants of inequality aversion, as the factors driving these preferences, their origins, and their distribution across the broader population still remain under researched.
Read more here: https://www.pnas.org/doi/10.1073/pnas.2401445121
*Thomas F. Epper, Ernst Fehr, Claus Thustrup Kreiner, Søren Leth-Petersen, Isabel Skak Olufsen and Peer Ebbesen Skov: Inequality aversion predicts support for public and private redistribution, Proceedings of the National Academy of Sciences (2024). DOI: 10.1073/pnas.2401445121
