Support for Redistribution in an Age of Rising Inequality: New Stylized Facts and Some Tentative Explanations


Vivekinan Ashok, Ilyana Kuziemko, and Ebonya Washington

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Ashok, Vivekinan, Ilyana Kuziemko, and Ebonya Washington (2015). Support for Redistribution in an Age of Rising Inequality: New Stylized Facts and Some Tentative Explanations, Brookings Papers on Economic Activity, BPEA Conference Draft, March 19–20.
Despite the large increases in economic inequality since 1970, American survey respondents exhibit no increase in support for redistribution, in contrast to the predictions from standard theories of redistributive preferences. We replicate these results but further demonstrate substantial heterogeneity by demographic groups. In particular, the two groups who have most moved against income redistribution are the elderly and African-Americans, two groups relatively more reliant on it. We find little evidence that these subgroup trends are explained by relative economic gains or growing cultural conservatism, two common explanations. We further show that the elderly trend is uniquely American, at least relative to other developed countries with comparable survey data. One story consistent with the data on elderly trends is that they worry that redistribution will come at their expense, in particular via cuts to Medicare. We find that the elderly have grown increasingly opposed to government provision of health insurance and that controlling for this tendency explains roughly half of their declining relative support of redistribution. For blacks, controlling for their declining support of race-targeted aid explains a large portion of their differential decline in redistributive preferences (raising the question of why support for race-targeted aid has fallen during a period when black income catch-up to whites has stalled).
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