Template-type: ReDif-Paper 1.0
Author-Name: Zaunbrecher, Henrik
Author-workplace-name: General Economics 0 (Onderwijs), RS: GSBE other - not theme-related research
Author-Name: Gagnon, Nickolas
Author-workplace-name: RS: GSBE other - not theme-related research, Microeconomics & Public Economics
Title: Declining Wages Increase Selfish Redistribution in an Environment with Fixed Income Inequality
Abstract: We use a highly-controlled laboratory experiment to study the causal impact of income decreases on redistribution decisions, in an environment where the income inequality that may be created with wage changes is kept fixed. First, we investigate the role of a decreasing wage compared to one’s past wage (intra-personal decrease). Second, we investigate the role of a wage that decreases relative to the wage of another person (inter-personal decrease). If intra-personal or inter-personal decreases create dissatisfaction for an individual, that person may support redistribution policies that compensate him or her for the situation or rectify it. Overall, we find evidence that individuals indeed behave more selfishly when they experience decreasing wages. While many studies examine the effect of income inequality on redistribution decisions, this is the first to isolate the effect of income changes.
Classification-JEL: c91,d31,d63
Series: GSBE Research Memoranda
Creation-Date: 20200827
Number: 023
File-URL: https://cris.maastrichtuniversity.nl/ws/files/50920418/RM20023.pdf
File-Format: application/pdf
File-Size: 670039
Handle: Repec:unm:umagsb:2020023
DOI: 10.26481/umagsb.2020023