Evolution over time of the determinants of preferences for redistribution and the support for the welfare state

Abstract

The objective of this article is to analyse the determinants of preferences for redistribution in Spain both at an aggregate and regional level. Using country level data, we put to the test the Alesina and Angeletos' (2005) hypothesis, the strong and positive relationship between the 'belief that luck determines income' and the support for redistributive policies. As an innovative contribution, we contrast this hypothesis using a set of panel data models with regional and time fixed effects. Our main finding is the existence of a structural change in preferences formation for redistribution in Spain between 1995 and 2007. Furthermore, the empirical results provide some evidence suggesting that (1) the belief that society is unfair have a moderate effect on the individuals' preferences for redistribution and (2) regional beliefs in Spanish regions are not equally important when determining demand for redistribution.

Theorizing the impact of fairness perceptions on the demand for redistribution

“…The present study confirms previous research on the impact of fairness judgements on the DFR (Alesina and Giuliano 2010;Alesina and La Ferrara 2005;Bjørnskov et al 2013;Corneo and Grüner 2002;Fong 2001;Fong, Bowles, and Gintis 2005;Iglesias, López, and Sántos 2013;Isaksson and Lindskog 2009;Kuhn 2010;Linos and West 2003;Miles 2014). It adds to a mounting body of evidence that shows the strong impact of normative evaluations of income distribution on redistribution preferences.…”

“…The first focuses on individual beliefs about meritocracy, while the second focuses on social mobility. Within the first approach, a number of studies analyse how beliefs on whether incomes are determined by factors within or beyond individuals' control affect redistribution preferences (Alesina and Giuliano 2010;Alesina and La Ferrara 2005;Bjørnskov et al 2013;Corneo and Grüner 2002;Fong 2001;Fong, Bowles, and Gintis 2005;Georgiadis and Manning 2012;Iglesias, López, and Sántos 2013;Isaksson and Lindskog 2009;Kuhn 2010;Linos and West 2003;Miles 2014). These studies evaluate survey questions that ask to what extent luck, family background, race or social ties as well as effort or skill determine incomes.…”

“…Those who believe that incomes are attained unfairly in their country, e.g. due to luck or nepotism, show greater support for redistribution from the top to the bottom; and those who believe that effort and skill determine incomes tend to show less support (Alesina and Giuliano 2010;Alesina and La Ferrara 2005;Corneo and Grüner 2002;Fong 2001;Fong, Bowles, and Gintis 2005;Iglesias, López, and Sántos 2013;Kuhn 2010;Linos and West 2003;Miles 2014).…”

What Determines the Demand for Redistribution and What Can We Expect from the Nearby Future: Empirical Evidence for Spain

“…Finally, the belief that individual success is essentially driven by hard work (hardwork) has a positive and very significant effect on the first explained variable. These findings are at odds with, on the one hand, the logic of methodological individualism that would indicate that those who believe to a greater extent in the fairness of the distributive system will be less likely to demand a higher level of income redistribution, and, on the other hand, most recent empirical studies that link these two variables (Alesina and Giuliano, 2011;Gaeta, 2012;Iglesias, Pena, and Sánchez, 2013). However, there is a precedent in the literature in which these atypical results emerge after an analysis similar to ours (Karayel, 2016).…”

“…Despite the plentiful literature about determinants of social preferences for redistribution, to the best of our knowledge, there is only a previous work dealing with this issue for the Spanish case (Iglesias, Pena, and Sánchez, 2013. In this article, the authors analyze the determinants of preferences for redistribution in Spain both at an aggregate and a regional level for two years, 1995 and 2007, and find the existence of structural changes in those preferences.…”