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The influence of income inequality aversion on redistribution in a democratic context

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  • Dooseok Jang
  • Joel Atkinson

Abstract

This paper illuminates one mechanism by which democracy may fail to mitigate income inequality despite a widespread preference against it. When income inequality aversion is prevalent, high‐skilled, higher‐wage workers may adjust their working time to reduce inequality. However, the decrease in societal efficiency due to forgone high‐skilled labor outweighs an increase in efficiency from lower‐skilled workers. This implies that a pivotal worker may reject strong redistribution in favor of overall efficiency. Moreover, if the pivotal voter believes that a socially prevalent aversion already mitigates income inequality, a lower tax preference is further reinforced.

Suggested Citation

  • Dooseok Jang & Joel Atkinson, 2021. "The influence of income inequality aversion on redistribution in a democratic context," International Journal of Economic Theory, The International Society for Economic Theory, vol. 17(3), pages 325-339, September.
    • Handle: RePEc:bla:ijethy:v:17:y:2021:i:3:p:325-339
    DOI: 10.1111/ijet.12258
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    References listed on IDEAS

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