Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/194228
Authors: 
Haußen, Tina
Year of Publication: 
2018
Series/Report no.: 
Jena Economic Research Papers 2018-004
Abstract: 
We empirically analyze the relationship between income inequality and individual preferences for public redistribution, focusing on intra-household income inequality between spouses. Using data from the German Socio-Economic Panel, we find that both one's own earned income and earned intra-household income inequality are significantly negatively related to preferences for public redistribution. However, as the earned income inequality between partners increases, the poorer partner's preference for public redistribution declines while the richer partner's preference for public redistribution increases. The poorer partners' preferences may, in fact, indicate preferences for intra-household redistribution from the richer to the poorer partner. The richer partners' preferences may be explained by the fact that, when married, they can realize tax savings and, therefore, have to pay relatively less for public redistribution. Moreover, our results confirm previous findings regarding a partner's future social mobility prospects upon cohabitation ending, because they show that having a strong outside option, i.e., a high wage potential, is significantly negatively related to redistributive preferences, especially among those with an above-average future wage potential.
Subjects: 
redistributive preferences
intra-household income inequality
cohabitation
prospects of upward mobility
JEL: 
D13
D31
D63
J12
H23
Document Type: 
Working Paper

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