The Subversive Nature of Inequality: Subjective Inequality Perceptions and Attitudes to Social Inequality

42 Pages Posted: 25 Aug 2016

See all articles by Andreas Kuhn

Andreas Kuhn

University of Zurich; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: July 2016

Abstract

This paper shows that higher levels of perceived wage inequality are associated with a weaker (stronger) belief into meritocratic (non-meritocratic) principles as being important in determining individual wages. This finding is robust to the use of an instrumental-variable estimation strategy which takes the potential issue of reverse causality into account, and it is further corroborated using various complementary measures of individuals’ perception of the chances and risks associated with an unequal distribution of economic resources, such as their perception of the chances of upward mobility. I finally show that those individuals perceiving a high level of wage inequality also tend to be more supportive of redistributive policies and progressive taxation, and that they tend to favor the political left, suggesting a feedback effect of inequality perceptions into the political-economic sphere. Taken together, these findings suggest that high levels of perceived wage inequality have the potential to undermine the legitimacy of market outcomes.

Keywords: inequality perceptions, attitudes to social inequality, legitimacy of market outcomes, beliefs about the causes of economic success, support of redistribution, political preferences

JEL Classification: D310, D630, J310

Suggested Citation

Kuhn, Andreas, The Subversive Nature of Inequality: Subjective Inequality Perceptions and Attitudes to Social Inequality (July 2016). CESifo Working Paper Series No. 6023, Available at SSRN: https://ssrn.com/abstract=2829308

Andreas Kuhn (Contact Author)

University of Zurich ( email )

Bluemlisalpstrasse 10
Zurich, 8006
Switzerland

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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