Template-Type: ReDIF-Paper 1.0
Title: Inequality of Opportunity and Income Redistribution
Author-Name: Marcel Preuss
Author-Email: mp2222@cornell.edu
Author-Name: Germán Reyes
Author-Email:german.reyes@briq-institute.edu
Author-Name: Jason Somerville
Author-Email: jason.somerville@ny.frb.org
Author-Name: Joy Wu
Author-Email: joy.wu@lmu.de
Classification-JEL: C91, D63
Keywords: Income inequality, demand for redistribution, fairness ideals


Abstract: We examine how redistribution decisions respond to the source of luck when there is uncertainty
about its role in determining opportunities and outcomes. We elicit redistribution decisions from
a representative U.S. sample who observe worker outcomes and whether luck could determine
earnings directly (Şlucky outcomesŤ) or indirectly by providing one of the workers with a relative
advantage (Şlucky opportunitiesŤ). We Ąnd that participants redistribute less and are less
responsive to changes in the importance of luck in environments with lucky opportunities. We
show that individuals rely on a simple heuristic when assessing the impact of unequal opportunities,
which leads them to underappreciate the extent to which small differences in opportunities
can have a large impact on outcomes. These Ąndings have implications for models of redistribution
attitudes and help explain the gap between lab evidence on support for redistribution
and inequality trends.



Note: 
Length: 68
Creation-Date: 2024-01
Revision-Date:
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp491
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2024_491