Subjective Evaluations of Wage Inequality and Preferences for Redistribution

This paper analyzes subjective evaluations of the wage distribution and preferences for redistribution using Swiss data from the International Social Survey Program. Preferences for redistribution are conceptualized and measured as the discrepancy between the perceived and the just level of wage inequality. The results suggest that there is both considerable support for equalisation of wages and at the same time broad acceptance of differences in wages due to different skill levels. Second, financial self–interest, social mobility, social norms about and perceptions of issues of distributive justice do influence individual preferences for redistribution. Additionally, it is argued that differences in the demand for redistribution may largely be explained by different evaluations of what ought to be and to a lesser extent by different perceptions of what actually is. JEL classification: D31, D63, H50