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Marriott Marquis, Balboa
American Economic Association
Inequality and Distributional Preferences
Friday, Jan. 3, 2020 2:30 PM - 4:30 PM (PDT)
- Chair: Imran Rasul, University College London and IFS
How Do the Rich Think About Redistribution?
AbstractWealthy individuals have a disproportionate influence on politics and firms. We study attitudes toward income redistribution using a large sample of wealthy Americans (top 5% based on income or financial assets). Compared to a sample representative of the bottom 95%, individuals in the top 5% are less supportive of redistribution as they favor lower taxes and were more likely to vote for Donald Trump in the 2016 presidential election. We find that this gap in attitudes is explained by preferences for inequality rather than beliefs about inequality. For beliefs about the sources of inequality, we find that the top 5% and bottom 95% hold similar opinions about the role of effort versus luck as determinants of success in life. For preferences towards unequal outcomes, we conducted an experiment where participants could redistribute earnings between pairs of workers. Compared to the bottom 95%, the top 5% redistribute less from high- to low-income workers and especially so when inequality is due to luck. Furthermore, this gap in distributional preferences is largely driven by individuals who acquired wealth over their lifetime rather than those who were born into wealth. Our findings raise the possibility that wealthy individuals who experienced upward social mobility contribute to the persistence of income inequality in the U.S.
The Boy Crisis: Experimental Evidence on the Acceptance of Males Falling Behind
AbstractWe study the impact of unjust inequality on social trust and trustworthiness, and how it interacts. The ‘boy crisis' prompts the question of whether people interpret inequalities differently depending on whether males or females are lagging behind. We study this question in a novel large-scale distributive experiment involving more than 5,000 Americans. Our data provide strong evidence of a gender bias against low-performing males, particularly among female participants. A large set of additional treatments establishes that the gender bias among female participants reflects statistical fairness discrimination. The study provides novel evidence on the nature of discrimination and on how males falling behind are perceived by society.
Social class and (un)ethical behavior: Causal versus correlational evidence
AbstractAre upper class individuals less ethical? Highly popularized research findings support this notion. This paper provides a novel test to evaluate the relationship between social status and ethical behavior. We successfully prime a large heterogeneous sample of the German population as either high or low social status. We then elicit ethical behavior in an incentivized experimental task. Thus, our data allows us to study both correlation (using demographic data) and causality (using the priming). We find no evidence of higher social status individuals being less ethical as prominently suggested by the literature. This result holds both for a respondent’s true social status and for her primed subjective social status. Our findings call for a re-interpretation of the existing evidence.
Erzo F.P. Luttmer,
University of Maryland
University College London
- H0 - General