Perceptions of inequality and attitudes towards redistribution in four East Asian welfare states

This study examined the effects of perceived economic inequality and inequality of opportunity on individual preferences for redistributive policies among people in mainland China, Japan, South Korea and Taiwan. Using data from the 2009 International Social Survey Program, a series of regression analyses were performed. Results of the analyses indicate that perceived economic inequality is the most significant predictive factor of attitudes towards redistribution in all four states. Perceived inequality of opportunity was positively associated with favourable attitudes towards redistribution in mainland China and South Korea. Perceived socioeconomic status was not found to have a significant effect on attitudes towards redistribution in South Korea.     

Public Attitudes towards Income Redistribution: Evidence from Hong Kong

The drivers of public support for redistributive policy have stimulated academic debate around the world. The majority of studies use cross‐country surveys conducted in the Organisation for Economic Co‐operation and Development countries to contribute to the debate on whether self‐interest or social values have more influence on public attitudes towards redistribution. Drawing on a phone survey conducted in 2013, this study advances the discussion by investigating public attitudes towards redistribution and social policy changes against the backdrop of buoyant government revenues in Hong Kong. The Hong Kong welfare model, best seen as a parallel to the liberal welfare state, is selective and residual. Contrary to the usual assumption, the social values hypothesis, viewing poverty as societal problems instead of individual reasons, has been supported in the Hong Kong context. It lends support to greater redistribution in a residual welfare state. The policy implications of the findings are also discussed.     

The performance of the Australian welfare system in a time of neoliberal economic reform

“Neoliberalism”, both as a body of theory and as a set of policies and practices, is commonly seen as unsympathetic, even antagonistic, to the welfare state. In the period from the mid‐1980s to the global financial crisis of 2007–08, Australia underwent very considerable “neoliberal” economic policy reform. What happened to the Australian welfare system and to Australia's socioeconomic egalitarianism in this period? To shed light on that question three kinds of trend are tracked. The first is household taxes and social expenditure in both cash and kind, using fiscal incidence analysis where the main metric is “net benefits”. The second is economic inequality, as measured by the distribution of incomes and wealth. The third is the performance of the labor market, as measured by earned incomes and unemployment rates. The article concludes with an attempt to integrate the evidence collected from these three sources. The general conclusion is that the Australian welfare system did not follow the pessimists' predictions. The welfare system grew in size and redistributive quantum. Wage levels rose strongly, while unemployment rates fell. Overall, income inequality increased to a small extent, though mainly before the full economic reform process was in place, while wealth inequality changed little.     

Minding Your Neighborhood: The Spatial Context of Local Redistribution*

Objectives. Previous research on redistribution by local governments has not accounted for spatial context. I develop a model of local own‐source redistributive spending that accounts for the economic characteristics and policy decisions of geographic neighbors. Methods. I estimate a modified spatial 2SLS equation of own‐source redistributive spending that accounts for endogeneity between neighboring policy decisions and own policy decisions. The data set spans the 48 contiguous states and utilizes data from the 2000 Census and the 1997 Census of Governments, among other sources. Results. I find that the policy choices and economic characteristics of jurisdictional neighbors are significantly related to own‐source housing and community development spending decisions. Jurisdictions reduce their redistributive policies to prevent unwanted movers from entering and produce redistributive packages similar to surrounding jurisdictions. Conclusions. The nuances of geographic context are a critical determinant of local redistributive spending decisions.     

Predicting Support for Eliminating the Dividend Tax: The Role of Framing and Attributions for Wealth

The proposed elimination of the dividend tax was among the most debated aspects of the Bush administration's economic stimulus package. Both the fairness of the initiative and who would benefit from it were questioned. Drawing on the political rhetoric of these debates, 86 respondents completed materials assessing the effects of framing and attributions for wealth on support for eliminating the dividend tax. The participants were less supportive of eliminating the dividend tax when it was framed as benefiting the wealthy than when the initiative was framed as benefiting the general public. Attributing wealth to personal initiative and "warm" feelings toward the wealthy emerged as the most powerful predictors of supporting the tax's elimination. Implications for social policy and economic justice are discussed.     

Socioeconomic status,perceived inequality of opportunity,and attitudes toward redistribution

Previous research suggests that an individual’s socioeconomic status (SES) is negatively associated with attitudes toward redistributive policies. The objective of this study is to examine whether the relationship between an individual’s subjective SES and his or her attitudes toward redistribution is contingent upon perceptions of inequality of opportunity. A series of multilevel analyses was performed using data from 28 countries from the 2009 International Social Survey Program (ISSP). Results revealed that the relationship between individual SES and attitudes toward redistribution was weaker among individuals who more strongly believed that success lies beyond the control of individuals. Shared perceptions of inequality of opportunity at the country level were also significant. The relationship between SES and attitudes toward redistribution was weaker in countries with higher levels of public perceptions of inequality of opportunity. In conclusion, people commensurately support redistribution policies (even contrary to their own self-interest) as they recognize the significance of inequality of opportunity. The greater the support among people for redistribution against their self-interest, the weaker the social cleavage in attitudes toward redistribution across different SES strata, and the higher the overall level of support for redistribution in society.     

The Lottery and Income Inequality in the States*

Objective. Since the early 1970s, income inequality in the United States has increased dramatically. We examine the impact of state lotteries on income inequality in the American states from 1976–1995. Methods. We use cross‐sectional time‐series data to evaluate the effect of lotteries as well as those of other state tax policies, redistributive programs, and demographic factors on income inequality. Results. We find that state lotteries foster income concentration. Ceteris paribus, states with lotteries have higher levels of income inequality than those states without a lottery. We also find that additional demographic and policy factors have an impact on income inequality in the states. Conclusions. One of the most important policy‐oriented determinants of income inequality is the lottery and a significant portion of the increase in income inequality over our two‐decade time period is attributable to the increasing prevalence and popularity of state lotteries.     

Should commodity tax rates be uniform across regions in a heterogeneous country? Evidence from India

With countries increasingly adopting the Goods and Services Tax (GST) as their system of commodity taxes replacing the myriad of sales, excise and other form of indirect taxes, there is a move towards the two features that characterize the GST: uniform tax rates across items and identical tax rates across regions. When India introduced the GST in 2017, it followed several other countries in departing from the first feature but in keeping with universal practice embraced the second feature. The chief motivation of this paper is to subject this latter feature to critical scrutiny. The study examines the four GST rates in India by comparing them with counterfactual evidence based on preference based optimal commodity tax rates estimated by taking into account regional diversity in prices and spending. The benchmarking suggests that the current top GST rates (12%, 16% and 28%) are much higher than can be justified by the optimal rates. The Indian evidence is also in favor of departing from the universal practice in GST of adopting a uniform tax across items. The paper makes a methodological contribution by proposing a procedure for calculating spatial prices that can be applied to a wide basket of items. The study provides evidence on the redistributive potential of indirect taxation by showing the progressive nature of the optimal commodity taxes. The latter result is of particular significance in developing countries where indirect taxes raise the greater share of revenue and provide an important policy tool for tackling increasing inequality. The study concludes with a list of policy lessons as the country seeks to make further changes to its GST. While there is a significant literature on harmonization of indirect taxes across countries that belong to a single economic grouping such as the EU, there is no such literature between regions within a large heterogeneous country. The present study on tax harmonization between the states in India attempts to fill this gap.     

The impact of fiscal shocks on real GDP and income inequality: What do Australian data say?

This paper examines the impact of three fiscal policy shocks on per capita real GDP and income inequality in Australia during the period 1965–2014. A small structural vector autoregressive (SVAR) model is constructed for an open economy for contemporaneous identification and estimation purposes. Based on the evidence of one cointegrating vector among the variables, a structural vector error correction (SVEC) model is specified for the long run. Direct taxation, indirect taxation receipts and government spending are identified as permanent fiscal policy shocks. The convergent use of two different models (SVAR & SVEC) strengthens the credibility of the results. The results have three key policy implications. First, a reduction in direct taxation receipts increases per capita real GDP without increasing income inequality. Second, a reduction in government expenditure significantly increases income inequality. Third, the adverse effect of indirect taxation receipts on income inequality is greater than the redistributive effect of government expenditure, which questions the widely held fiscal policy strategy of using indirect taxation to finance redistributive expenditure.     

On Inter‐ and Intra‐Individual Redistribution of the Welfare State*

Objective. The redistributive effect of the welfare state is traditionally measured by comparing the gross and net distribution of annual income among adults. This standard approach does not account for the fact that a large share of the taxes paid by adults are paid back to the very same individuals later in life. The objective of this article is to examine the factors that determine the difference between redistribution according to the standard approach and redistribution of lifetime incomes. I also discuss under what circumstances intra‐individual redistribution is beneficial for low‐income earners. Methods. A formal model of a simple welfare state in a society with low‐ and high‐income earners is used to describe inequality of gross and net income among adults and for complete lifetime incomes. The model is calibrated with data describing the Swedish welfare state. Results. Theoretically, the redistribution of lifetime income can be bigger or smaller than the redistribution indicated by the standard approach. Swedish data suggest that most welfare states are more redistributive when a lifetime perspective is used compared to the standard approach. Conclusions. Most of the redistribution carried out by modern welfare states is so‐called intra‐individual redistribution. Compared to the situation that would arise without the welfare state, intra‐individual redistribution is likely to be favorable for low‐income earners because it compensates for inequalities in the distribution of assets and access to capital markets.     

Inequality and Political Consensus

This paper develops a model of political consensus in order to explain the missing link between inequality and political redistribution. Political consensus is an implicit agreement not to vote for extreme policy proposals. We show that such an agreement may play an efficiency-enhancing role. Voters anticipate that voting for extremist parties increases policy uncertainty in the future. A political consensus among voters reduces policy uncertainty because self-interested politicians propose non-discriminatory policies. We study how much inequality can be sustained in a democracy and how the limits to redistribution vary with initial inequality. The bounds of the set of political equilibria may react in a fundamentally different manner to changes in exogenous variables than do the policy variables in the one-dimensional, one-shot game. More initial inequality need not lead to more redistribution from the rich to the poor. The maximum amount of redistribution decreases with inequality if (and only if) agents are sufficiently patient. In this case inequality is politically self-sustaining.     

The poor “sociological imagination” of the rich: Explaining attitudinal divergence towards welfare,inequality, and redistribution

Quantitative research has tended to explain attitudinal divergence towards welfare and redistribution through self‐interested rationalities. However, such an approach risks abstracting individuals from the structural determinants of resource allocation and biographical experience. With that in mind, this article draws on a qualitative study of 50 individuals experiencing relative deprivation and affluence in the United Kingdom and New Zealand to examine how lived experiences of inequality affect attitude formation towards welfare and redistribution. Scenario‐driven vignettes were used to stimulate an applied discussion of abstract principles pertaining to welfare and inequality. Use of this methodological device proffered novel insight into the phenomenological effects of material position on public attitudes and policy preferences in a comparative context. The findings suggest that affluent individuals are less likely to acknowledge systemic features shaping socioeconomic life. As a result, they exhibit a poor sociological imagination that is deployed in distinct and patterned ways to make sense of, and at times justify, economic restructuring. By contrast, those living in relative deprivation are more likely to advance accounts of intergroup relations and social location that emphasize the structuration of (dis‐)advantage. Based on the findings, policy and political implications are considered for welfare and redistribution amidst rising structural inequality.     

The redistributive effect of social transfer programmes and taxes: A decomposition across countries

The aim of this article is to offer detailed information of the redistributive impact of social transfer programmes and taxes in 28 Member countries of the Organisation for Economic Co‐operation and Development, employing data that have been computed from the Luxembourg Income Study's micro‐level database. We find that welfare states on average reduce inequality by 35 per cent. Social benefits have a much stronger redistributive impact than taxes. As far as social programmes are concerned, public pensions account for the largest reduction in income inequality, although the pattern is diverse across countries. To a lesser extent, social assistance, disability and family benefits also contribute to smaller income disparities.     

Who Wants to Redistribute? An Analysis of 14 Post‐Soviet Nations

We investigate population groups' attitude regarding inequality reduction in post‐Soviet transitional countries of the Baltic, Central Asia and the Caucasus, as well as the Slavic countries and Moldova. Empirical evidence presented in this article demonstrates that despite skyrocketing inequality, erosion of social provisions and efforts to introduce an individualistic market economy ideology during the last 15 years, overall support for redistribution and welfare state efforts to counterbalance rising inequality remained strongly legitimized among citizens in all post‐Soviet countries. Nevertheless, there are differences between population groups in attitude: the older, the less educated, the poor and women express more support for redistribution; while the younger, the better educated, the rich and men tend to not support redistribution. Populations in transitional countries of the Caucasus and Central Asia that face higher inequality and less effective redistribution policies expressed a strong desire for more redistribution and more active social welfare policies.     

生命历程视角的城市居民二套房获得

本文从生命历程理论视角研究住房市场化背景下宏观和微观因素对城市居民二套房获得的影响,提出了“世代机遇论”“购房时机说”“精英优势论”“家庭禀赋说”和“理性选择说”等命题,并依据2010年广州市千户问卷调查数据,运用离散时间事件史模型进行验证。研究发现,在二套房获得上,世代和单位因素影响减弱,职业地位和家庭因素影响增强,经济管理精英、专业精英,以及家庭经济能力强、家庭资助或在房改结束前获得首套房的居民具有优势,房价上涨在一定程度上促进了二套房的购买。本文认为,早期市场化改革为不同阶层提供了住房机遇,但再分配和市场导致的住房不平等在住房市场化过程中相互强化,未来住房改革的重点在于避免住房贫富分化加剧。     

OECD国家家庭福利政策实践与启示

家庭福利政策作为OECD国家政策体系的有机组成部分,在稳定家庭功能、提高家庭福祉等方面发挥了重要作用。税收优惠是国外家庭福利供给的主要手段,美国近一半的家庭福利、日本近40%的家庭福利来自税收优惠。在经济体制深刻变革、社会结构深刻变动、利益格局深刻调整、思想观念深刻变化的形势下,我国传统家庭功能正在经受严重冲击,家庭互助、家庭照料、社会融合等婚姻家庭新问题不断凸显。文中系统梳理近20个OECD国家的家庭税收优惠措施,提出在我国工薪所得税中率先探索家庭税收优惠政策,提高家庭发展能力。     

平等主义国家理想与区隔主义官僚体系：一个社会分层结构的新模型

通过重新分析“再分配”的概念,本文跳出以往社会主义国家社会分层研究中,对于精英与普通民众区隔的过分关注,提出了一个新的社会分层模型。本文认为,社会主义社会的分层结构是由平等主义（egalitarian）国家理想与区隔主义（particularistic）官僚体系间的矛盾所决定的。1 再分配本身并不产生不平等,而是再分配过程中的官僚及官僚政治行为造成了社会主义的社会不平等。与再分配中心的距离远近不仅决定了在再分配体系中的地位高低,也决定了遭受官僚政治影响的程度大小。在社会转型时期,基层官僚在再分配时期的优势将进一步继续,而整个社会分层结构上的差异也将逐步扩大。     

How much do OECD countries spend on social protection and how redistributive are their tax/benefit systems?

The global economic crisis has reignited interest in social policy and public spending on different types of social benefits. Public social spending‐to‐GDP ratios are often used to consider the magnitude of welfare systems in international perspective, but such comparisons alone give an incomplete picture of social effort across countries. This article looks at these different factors, before briefly considering the redistributive nature of tax/benefit systems in different member countries of the Organisation for Economic Co‐operation and Development (OECD). The article also considers trends in social spending and compares spending in the late 2000s with the early 1990s when the previous economic crisis played out. The article ends by illustrating the profound effect the recent global economic crisis had on social spending trends across OECD countries.     

From Riches to Riches: Intergenerational Transfers and the Evidence from Estate Tax Returns*

Objective. Intergenerational transfers of wealth and ability can influence the distribution of wealth. This research examines the empirical relationships among intergenerational variables and cross‐sectional wealth distribution. Methods. Models pioneered by Gary Becker set out the conditions necessary for regression to the mean in wealth across generations. However, empirical testing of such models has been incomplete because large, reliable, intergenerational data sets—especially with data from three generations—are hard to find. This article unveils a remarkable new source of intergenerationally linked data: federal estate tax records filed in Wisconsin from 1916 to 1981 and linked across three generations of families. Results. Wealth tends to regress to the mean at the top end of the distribution, but slowly. Consequently, wealth inequality in the United States is likely to persist. What is more, recent federal tax changes, particularly the repeal of the estate tax and the reduction in capital gains tax rates, will exacerbate cross‐sectional wealth disparities. Conclusions. In the long run, intergenerational forces may help overcome inequalities in wealth across U.S. families. Empirical results suggest, however, that regression to the mean will occur quite slowly, and the long run could be long indeed.     

Getting low educated and older people into work: The role of fiscal policy

Raising employment, in particular employment among older individuals and low educated individuals, stands high on the agenda of policy makers in many OECD countries. Increased sensitivity in recent years to rising inequality has made the challenge only larger. In this paper we evaluate alternative fiscal policy scenarios to face this challenge. We construct and use an overlapping generations model for an open economy where individuals differ not only by age, but also by innate ability and human capital. The model allows us to study effects on aggregate employment, per capita income and welfare, as well as effects for specific age and ability groups. We show that well-considered fiscal policy changes can significantly improve macroeconomic productive efficiency, without increasing intergenerational or intragenerational welfare inequality. Our results strongly prefer a reduction in the labor tax rate on older workers and on all low-wage earners, financed by an overall reduction in non-employment benefits. An alternative financing option is to raise the consumption tax rate. These results are to be seen as long-run effects for economies at potential output.