Journal Article

Fairness and the Unselfish Demand for Redistribution by Taxpayers and Welfare Recipients

Sabatini, Fabio, Yamamura, Eiji, Ventura, Marco, Zamparelli, Luca

2020

Overview

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.

• Publisher: Southern Economic Association,Wiley,John Wiley & Sons, Inc
• Subject: and Other Normative Criteria and Measurement / civic capital / D63 / D63 - Equity / D69 / ddc:330 / Economic Anthropology / Economic models / Economic Sociology / Fairness / free-riding / H10 / H10 - General / H50 - General / H53 / H53 - Government Expenditures and Welfare Programs / Income distribution / income inequality; redistribution; welfare economics / Income redistribution / inequalities / Inequality / Justice / Low income groups / Redistribution / social capital / Supply & demand / Tax rates / Taxation / Welfare / Welfare recipients / Z1 / Z1 - Cultural Economics