Income Composition Inequality and Preferences for Economic Redistribution.

• In Event: Class, Economic Inequality, & Public Opinion

Abstract

Who supports the welfare state is a question that has attracted considerable scholarly attention in Political Science. Focusing on different contexts, using different data, and drawing on different methods, existing scholarship has identified a number of factors that meaningfully predict welfare state attitudes. While some of these factors, such as income, socio-economic status, exposure to risk, employment insecurity, and indebtedness are mainly related to one’s material self-interest (Metzer and Richard 1981, Cusack et al. 2006, Rehm 2009, Brooks and Svallfors 2010), others pertain to religion (Stegmueller 2013), altruism (Dimick et al. 2016), personal security (Rueda and Stegmueller 2016), group belonging (Shayo 2009), increasing diversity (Alesina and Glaeser 2004, Putnam 2007), and intolerance for inequality (Lu and Scheve 2016). Although the literature has explored the effect of different types of asset ownership, much remains unknown about the way in which the distribution of wealth shapes preferences for redistribution.

This article examines the impact of income composition inequality - or the degree to which income composition per se varies across the income distribution - on preferences for economic redistribution. I argue that citizens living in countries characterized by high income composition inequality, which denotes an economic system where the rich rely exclusively on capital income while the poor only earn labor income, are more in favor of a generous welfare state than people living in economies defined by low income composition inequality. This is because low income composition inequality is associated with greater dependence on other sources of income and lower exposure to employment risk. Nevertheless, this effect is conditional on respondents' income and education. Drawing on a novel database that further enriches our understanding of capital and labor income ownership in Europe, I test my hypothesis with individual- and aggregate-level data from 22 European countries between 2004 and 2018.

Author

• Bilyana Petrova, City University of New York