WSEAS Transactions on Business and Economics
Print ISSN: 1109-9526, E-ISSN: 2224-2899
Volume 14, 2017
Do Income Status and Mobility Determine Demand for Income Redistribution? Experimental Evidence
Authors: Ilja Neustadt, Peter Zweifel
Abstract: In this paper, demand for income redistribution is elicited through a discrete choice experiment performed with a representative sample of the Swiss population. Attributes include both the amount of redistribution as a share of GDP and its uses (working poor, the unemployed, old-age pensioners, families with children, people in ill health) as well as the nationality of beneficiaries. The paper investigates economic determinants of citizens’ willingness to pay for redistribution, using static and dynamic measures of well-being. Demand for redistribution is shown to increase rather than decrease with income and other static measures of well-being, contradicting the conventional Meltzer-Richard model. However, the dynamic Prospect of Upward Mobility hypothesis receives limited empirical support.