Redistributive choices and increasing income inequality: experimental evidence for income as a signal of deservingness

Original Paper

DOI: 10.1007/s10683-017-9516-5

Cite this article as:
Gee, L.K., Migueis, M. & Parsa, S. Exp Econ (2017). doi:10.1007/s10683-017-9516-5
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Abstract

We explore the relation between redistribution choices, source of income, and pre-redistribution inequality. Previous studies find that when income is earned through work there is less support for redistribution than when income is determined by luck. Using a lab experiment, we vary both the income-generating process (luck vs. performance) and the level of inequality (low vs. high). We find that an increase in inequality has less impact on redistribution choices when income is earned through performance than when income results from luck. This result is likely explained by individuals using income differences as a heuristic to infer relative deservingness. If people believe income inequality increases as a result of performance rather than luck, then they are likely to believe the poor deserve to stay poor and the rich deserve to stay rich.

Keywords

Income redistribution Fairness Experimental economics 

Supplementary material

10683_2017_9516_MOESM1_ESM.pdf (765 kb)
Supplementary material 1 (PDF 766 kb)

Copyright information

© Economic Science Association 2017

Authors and Affiliations

  1. 1.Tufts UniversityMedfordUSA
  2. 2.Federal Reserve BoardWashington DCUSA