Learning About Inequality Increases Concern, But Not Necessarily Support for Redistribution

A puzzle: income inequality between the top 1% and the rest has surged in the last few years, yet support for redistribution among the general public has actually declined (see figure below).

Do people not care about inequality, or do they not know the facts?

To test this hypothesis, Ilyana Kuziemko recently conducted an online experiment using members of the Amazon Mechanical Turk community (essentially an online labor market where individuals complete short computer-based tasks for negotiated wages). 

The treatment group received an “information shock” where they were told where they fall in the current income distribution, and what their household income might be if income inequality had not increased between 1980 and 2010. (Recall from a previous post that Americans underestimate the extent of income inequality).

The control group did not receive an information shock. The treatment and control groups then answered several questions about how important a social problem inequality is, and preferences for redistributive tax and transfer policies.

The main result is that across political affiliations and income profiles, people exposed to the information shock express much greater concern about income inequality (40 percent greater), but generally do not support more redistributive policies. Liberal-conservative differences on issues like raising taxes on millionaires hardly budge. They also do not have a huge effect on support for anti-poverty policies (EITC, food stamps, minimum wage).

The one main exception was that support for continuing the estate tax (which almost exclusively falls on very wealthy households), was greatly increased in the treatment group. Here’s one intriguing hypothesis offered by the authors:

“Correcting wildly misinformed views on welfare was not sufficient to change respondents’ support, though perhaps the lack of elasticity is due to the racial stereotypes the word “welfare” bring to mind (Gilens, 1996). It may be the case that the estate tax is one of a few issues on which voters are highly misinformed but is not linked to racial or other stereotypes.”

The other important thing to note is that trust for government was relatively low in both the treatment and control groups – but paradoxically trust for government decreases in the control group even as they profess greater approval for the government taking a more active role in addressing income inequality.

“In general, providing information about the growth of inequality and the ability of the government to raise taxes and redistribute have complicated effects on views of government. It appears to make them simultaneously see more areas of society where government intervention may be needed but simultaneously make them trust government less.”

What do we make of these findings? It suggests that working on anti-poverty policies may be a harder slog than anti-inequality policies. It also could suggest a vicious cycle: people feel less empowered and more distrustful in the face of growing inequality, even as they express an abstract desire for the government to do something about the problem.

Although it’s not ironclad evidence, the authors show that willingness to send an email to a U.S. Senator addressing the estate tax does increase substantially (although they do not have evidence that sending the email actually takes place). Giving people “voice” is in some respects harder in the current era, in which government feels very distant and unapproachable to most citizens. Finding small, but meaningful ways, to get people involved in the conversation on inequality is an important direction to pursue for future politics. Rather than concluding that the public will never support redistribution in policy, those who seek to reduce inequality might try to help voters to see a path that links their political participation with more redistributive policies (and conversely to punish elected officials that do not listen to constituent preferences on redistributive policies).