Fairness and the Unselfish Demand for Redistribution by Taxpayers and Welfare Recipients |
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Authors: | Fabio Sabatini Marco Ventura Eiji Yamamura Luca Zamparelli |
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Institution: | 1. Department of Economics and Law, Sapienza University of Rome, Via del Castro Laurenziano 9, 00161 Rome, Italy and IZA, Bonn, Germany;2. Department of Economics and Law, Sapienza University of Rome, Via del Castro Laurenziano 9, 00161 Rome, Italy;3. Department of Economics, Seinan Gakuin University, 6 Chome-2-92 Nishijin, Sawara Ward, Fukuoka, 814-0002 Japan |
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Abstract: | We theoretically illustrate how the aversion to unfairness triggers an unselfish though rational demand for redistribution. This leads the well-off to demand positive tax rates and the “poor” to reject extreme progressivity. We prove that the “rich” and the “poor” adjust their demand for redistribution in opposite ways when their sensitivity to fairness increases: while agents with above average expected income raise their demand for redistribution, agents with below average income lower it. We then provide empirical evidence of these behaviors using a nationally representative survey from Italy. The estimates confirm that a stronger aversion to unfair distributive outcomes is associated with a higher support for redistribution by individuals with high income and to a lower demand for redistribution by those with low income. |
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