The redistributive consequences of segregation and misperceptions

In this paper I present a model in which an increase in income inequality can lead to a decrease in voters’ demand for redistribution. In my model, people sort into groups according to income and as a result they become biased about the shape of the income distribution. I demonstrate that an increas...

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Bibliographic Details
Published inEuropean economic review Vol. 144; p. 104073
Main Author Windsteiger, Lisa
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.05.2022
Subjects
Inequality
Misperceptions
Personal income distribution
Redistribution
Segregation
Personal income distribution
D31
Redistribution
Segregation
H53
Misperceptions
H24
D83
Inequality
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Summary:In this paper I present a model in which an increase in income inequality can lead to a decrease in voters’ demand for redistribution. In my model, people sort into groups according to income and as a result they become biased about the shape of the income distribution. I demonstrate that an increase in inequality can lead to a decrease in perceived inequality in the presence of segregation, and hence to a fall in people’s support for redistribution.
ISSN:0014-2921
1873-572X
DOI:10.1016/j.euroecorev.2022.104073