Tag "income redistribution" – News

Koen Schoors studied how institutional quality moderates the relationship between generalized trust and preferences for redistribution. It has been well established in the literature that generalized trust is conducive to greater support for redistribution because it reduces expectations of cheating and free-riding among others.

Using laboratory experiments conducted in two countries, we examine how poor institutions influence individuals support for redistribution. Contrary to conventional expectations, we argue that high-earning individuals will prefer more redistribution when they can more easily evade taxes. To test our expectations, we conducted a series of experiments from February to May 2016 simulating earned income and tax evasion. We find that high earners do indeed prefer more redistribution when they can more easily under-report their income. Our findings make an important contribution to the little studied question of how institutional quality affects social policy preferences.

People have different preferences for income redistribution. Some people support it as they believe it helps to decrease the level of social inequality while others are satisfied with the status quo and they are against redistribution. According to some research, preferences for redistribution are influenced by individual characteristics like sex, age, income, education. However, there are some other factors, for instance, social institutes. In countries with poor social institutes people with high incomes are more inclined to support redistribution as they can more easily avoid taxes. Presenting an article «Institutional Quality and Social Policy Preferences», the professor of HSE Israel Marques spoke about the experiments on studying this effect.

On October 13 a research seminar on political economy took place at HSE. Anja Neundorf (University of Nottingham) presented the report on 'Contextual and Individual Determinants of Economic Preferences: Evidence from Panel Data'.