Preferences for Redistribution in the Land of Opportunities


Alesina, Alberto, and Eliana La Ferrara. 2005. “Preferences for Redistribution in the Land of Opportunities.” Journal of Public Economics 89: 897-931.
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This paper explores how individual preferences for redistribution depend on future income prospects. In addition to estimating the impact of individuals’ socioeconomic background and of their subjective perceptions of future mobility, we employ panel data to construct 'objective' measures of expected gains and losses from redistribution for different categories of individuals. We find that such measures have considerable explanatory power and perform better than 'general mobility' indexes. We also find that preferences for redistribution respond to individual beliefs on what determines one’s position in the social ladder. Ceteris paribus, people who believe that the American society offers 'equal opportunities are more averse to redistribution.

Last updated on 04/03/2013