Inequality prompts support for redistribution

Income inequality leads to popular support for redistribution, according to a study that looked at evidence from 33 European countries over the period 2002–2010. It was also found that the actual level of redistribution implemented in a country decreases support for more redistribution.

Key findings

  • Income inequality affects preferences for redistribution, not only when analysing cross-country differences but also when focusing on changes over time.
  • Increases in pre- or post-tax income inequality over time are found to raise the demand for redistribution, which is line with economic models that have hitherto not gathered much empirical support.
  • An additional percentage point in the Gini index (a statistical measure of inequality) is found to be associated with an increase of 0.32–0.62 points in demand for redistribution.
  • The study identifies a number of variations in support for redistribution between different groups. Only individuals with at least lower secondary education seem to support redistribution. Higher support for redistribution is also found among women, younger people, single people, unemployed people, trade union members and people belonging to a minority-ethnic group. People with higher incomes are less in favour of redistribution, as are those with relatively good health. Religiosity, irrespective of any particular religion, has a positive effect on the demand for redistribution.

Source: Javier Olivera, Preferences for Redistribution in Europe, WP2012/25, Geary Institute (University College Dublin)