Income Mobility and Preferences for Redistribution: Empirical Observations

There is a growing body of literature questioning the proposition that solely the relative position in the income distribution determines individual preferences for redistribution as stated by Meltzer and Richard (1981). Hence, it is questionable whether individuals with relatively low pre-tax income indeed support high levels of redistribution (and vice versa). The theory-based literature demonstrates that the demand for redistribution is not necessarily outcome oriented, but may include, for example, the need for fairness and equity. In addition, according to Piketty (1995) and the theory-based study in Chapter 8, past income history is important for individual preferences with respect to redistributive policies. Experiencing income mobility positively affects individual beliefs regarding hard work as crucial for personal economic success.