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Intergenerational Earnings Mobility and Preferences for Redistribution

Author

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  • Siedler, Thomas

    (University of Potsdam)

  • Sonnenberg, Bettina

    (DIW Berlin)

Abstract

This paper analyzes the extent to which intergenerational upward and downward mobility in earnings are related to individuals' preferences for redistribution. A novel survey question from the German Socio-Economic Panel Study – whether the taxes paid by unskilled workers are too high, adequate or too low – are used to elicit attitudes toward redistribution. Intergenerational mobility with regard to long-term earnings is measured using a rich panel data spanning an observation window of 22 years. The results reveal that intergenerational mobility is significantly related to preferences for redistribution. The empirical results yield strong and robust support for Piketty's (1995) rational-learning theory: individuals who experience upward (downward) intergenerational mobility are less (more) likely to favor redistribution taxation policies.

Suggested Citation

  • Siedler, Thomas & Sonnenberg, Bettina, 2012. "Intergenerational Earnings Mobility and Preferences for Redistribution," IZA Discussion Papers 6981, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6981
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    1. Intergenerational Earnings Mobility and Preferences for Redistribution
      by maximorossi in NEP-LTV blog on 2012-12-05 19:51:50

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    Cited by:

    1. Clark, Andrew E. & Cotofan, Maria, 2023. "Are the Upwardly-Mobile More Left-Wing?," IZA Discussion Papers 16290, Institute of Labor Economics (IZA).
    2. Javier Cortes Orihuela & Juan D. Díaz & Pablo Gutiérrez Cubillos & Pablo A. Troncoso, 2023. "Intergenerational earnings persistence and the provision of public goods: evidence from chile’s constitutional process," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 21(1), pages 47-81, March.
    3. Campomanes, Ignacio P., 2024. "The political economy of inequality, mobility and redistribution," Journal of Macroeconomics, Elsevier, vol. 79(C).

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    More about this item

    Keywords

    preferences for redistribution; intergenerational mobility; long-run earnings; panel data;
    All these keywords.

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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