Distributive Justice and Social Policy: Some Reflections on Rawls and Income Distribution

This paper adapts the Rawlsian idea of decision making behind the veil of ignorance in the realm of income transfer systems. As rational decision makers, we would plan a society where the incidence of poverty is low, differences in the level of living between life cycles are small, income differences between the rich and poor are modest, income mobility from poverty to non-poverty is high, and where the living standard of the poor is decent. The results show that income mobility is not greater in those countries which have wide income differences, nor is the situation of the poor any better in countries with huge income disparities than in other countries. Cross-national comparisons indicate that high poverty rates are not associated with more rapid income mobility and higher standards for the poor.