Class, Ethnicity, and Inequality: Public Support for Wealth Protection Policies

• In Event: The Political Economy of Wealth Inequality

Abstract

By protecting asset owners and boosting asset prices, policy interventions in major economic crises can prevent financial meltdowns while increasing wealth inequality, exacerbating the structural disadvantages of wealth-poor minorities. How do people evaluate this trade-off, and how does this evaluation influence their support for crisis interventions? The policy responses to both the Covid-19 pandemic and the global financial crisis have demonstrated the pertinence of these questions. We use an information treatment and a conjoint survey experiment conducted in two ethnically diverse countries, Australia and the United Kingdom, to provide some answers to these questions. The former tests whether information about the effect of crisis policy interventions on “class” and “ethnic” inequality affects people’s general policy preferences, while the conjoint experiment examines preferences for specific policies (income support, asset prices, debt rescheduling, debt restructuring and targeted support for wealth-poor groups). We find that most people support general wealth protection policies in crises, if slightly less intensely than they prefer large income subsidies. On average, people also support targeted interventions that redistribute wealth towards poor households on the basis of class, but they oppose interventions that would tackle ethnic inequality. The provision of information about wealth inequality between ethnic groups has little impact on preferences, while information about wealth inequality between classes reduces support for wealth protection. These results suggest that there is little appetite for using bold measures during crises to redistribute wealth to reduce one of the most enduring sources of structural disadvantage for ethnic minorities.

Authors

• Björn Kristen Bremer, Central European University

• Jeffrey M. Chwieroth, London School of Economics

• Andrew Walter, School of Social and Political Sciences, University of Melbourne