Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/248938 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9393
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We present new evidence showing that fiscal austerity strengthens support for redistribution, especially for the relatively well-off. Our theoretical model proposes two mechanisms to explain this heterogeneity in support for redistribution: ‘altruism’ and ‘appreciation’. We test our theoretical model’s predictions by matching attitudes reported in the British Social Attitudes Survey with local area-level spending cuts in England over the period 2010 to 2015. We exploit the spatial and temporal variation in spending cuts at the Local Authority level to compute a plausibly exogenous measure of the austerity shock. We find evidence for these two channels.
Subjects: 
austerity
fiscal consolidation
fiscal policy
redistribution
political attitudes
altruism
appreciation
JEL: 
D30
D64
E62
H20
H30
H60
Document Type: 
Working Paper
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