Fairness Perceptions of Redistribution and Predistribution
The paper titled "Fairness Perceptions of Redistribution and Predistribution" by Krishna Srinivasan, Justin Valasek and Weijia Wang has been published in Journal of Public Economics
Abstract
To address rising income inequality, governments typically rely on two levers: predistribution policies that implement inequality reduction before incomes are earned—e.g., minimum-wage laws—and redistribution policies that implement inequality reduction after incomes are earned—e.g., taxes and transfers. We explore whether support for reducing inequality depends on the choice of policy lever. Using incentivized experiments with the general population of the US and Sweden (), we study inequality reduction under predistribution and redistribution, focusing on whether inequality reduction is implemented before or after income is earned. We find that timing matters: subjects in both countries reduce inequality more under predistribution than redistribution. Furthermore, subjects in the predistribution treatment more often invoke equal effort to justify reducing inequality, while those in the redistribution treatment more often invoke adherence to the initial agreement to justify preserving it. Overall, our results imply that the choice between predistribution and redistribution can influence public support for reducing inequality.