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Inequality of Opportunity and Income Redistribution

Author

Listed:
  • Marcel Preuss

    (Cornell University)

  • Germán Reyes

    (Cornell University)

  • Jason Somerville

    (Federal Reserve Bank of New York)

  • Joy Wu

    (Ludwig-Maximilians-Universität München (LMU Munich))

Abstract
We examine how people redistribute income when there is uncertainty about the role luck plays in determining opportunities and outcomes. We elicit redistribution decisions from a U.S.- representative sample who observe worker outcomes and whether luck magnified workers’ effort (“lucky opportunities”) or determined workers’ income directly (“lucky outcomes”). We find that participants redistribute less and are less reactive to changes in the importance of luck in environments with lucky opportunities. Our findings have implications for models that seek to understand and predict redistribution attitudes, and help to explain the gap between lab evidence on support for redistribution and U.S. inequality trends.

Suggested Citation

  • Marcel Preuss & Germán Reyes & Jason Somerville & Joy Wu, 2023. "Inequality of Opportunity and Income Redistribution," CEDLAS, Working Papers 0309, CEDLAS, Universidad Nacional de La Plata.
    • Handle: RePEc:dls:wpaper:0309
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    References listed on IDEAS

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    Cited by:

    1. Justin Valasek & Pauline Vorjohann & Weijia Wang & Justin Mattias Valasek, 2024. "Fairness Preferences, Inequality Acceptance and Default Effects," CESifo Working Paper Series 11288, CESifo.
    2. Peter Andre, 2022. "Shallow Meritocracy," CRC TR 224 Discussion Paper Series crctr224_2022_318v2, University of Bonn and University of Mannheim, Germany.
    3. Alexander Cappelen & Yiming Liu & Hedda Nielsen & Bertil Tungodden, 2024. "Fairness in a Society of Unequal Opportunities," Rationality and Competition Discussion Paper Series 506, CRC TRR 190 Rationality and Competition.
    4. Fehr, Dietmar & Müller, Daniel & Preuss, Marcel, 2024. "Social mobility perceptions and inequality acceptance," Journal of Economic Behavior & Organization, Elsevier, vol. 221(C), pages 366-384.
    5. Andrea Pogliano, 2024. "Born That Way: Beliefs about Genetics’ Importance and Redistribution Preferences," Tinbergen Institute Discussion Papers 24-017/I, Tinbergen Institute.
    6. Belguise, Margot & Huang, Yuchen & Mo, Zhexun, 2023. "Non-Meritocrats or Conformist Meritocrats? A Redistribution Experiment in China and France," CEPREMAP Working Papers (Docweb) 2308, CEPREMAP.

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    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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