Preferences for redistribution – a cross-country study in fairness

This paper seeks to explain within as well as between country variation in preferences for redistribution in terms of self interest concerns, and an input based concept of fairness captured by the effects of beliefs about the causes of income differences. Results of estimations based on data for the US, Sweden, Germany and Hungary indicate that both of these factors are important determinants of general redistribution support, in line with hypothesised patterns. Furthermore it is found that not only do beliefs about causes of income differ widely between countries, but also the effects of these beliefs, suggesting considerable heterogeneity across societies in what is considered as fair.

Introduction: Rational economic self-interest seemingly fails to account for the wide spread in support for income redistribution.Judging from standard economic reasoning, according to which individuals are motivated by self-interested utility maximization, this constitutes a puzzle. However, there is a growing consensus, based on a vast experimental literature, that people are motivated by forces other than self-interest, and particularly so by fairness considerations.

Author: Ann-Sofie Isaksson,Annika Lindskog

Source: Goteborg University

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