Growth and Inequality: Experimental Evidence on How Misperceptions Affect Redistribution

Abstract

Many policies affect future inequality, from taxation to investments in children’s equal access to education. Citizens’ support for such policies may therefore depend on their beliefs about how inequality will evolve over time. In three large-scale experiments, I examine how well individuals predict future inequality in the presence of economic growth, and I examine how beliefs about inequality matter for people’s preferences for redistribution. I show that although most people underestimate future increases in inequality, this is inconsequential as beliefs about inequality do not influence preferences for redistribution. Rather, what matters is whether individuals know if redistribution is costly for themselves.

Publication
Growth and Inequality: Experimental Evidence on How Misperceptions Affect Redistribution
Jonas Pilgaard Kaiser
Jonas Pilgaard Kaiser
PhD Candidate in Economics

Jonas Pilgaard Kaiser is a PhD candidate in economics at Aarhus University. His primary research interests are within behavioural and experimental economics.

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