Distributive Preferences, Social Norms and Redistribution

Departing from mainstream economics, surveys first show that individuals do care about fairness in their demand for redistribution. They also show that the cultural environment in which individuals grow up affects their preferences about redistribution. Including these two components of the demand for redistribution, we propose in this article a mechanism of cultural transmission of the concern for fairness. Consistently with the process of socialization, preferences of the young are partially shaped through observation and imitation of other's choices. More specifically, observing during childhood how adults have collectively failed to implement fair redistributive policies lowers the concern for fairness or the moral cost of not supporting a fair taxation. Based on this mechanism, the model exhibits a multiplicity of history-dependent steady states that may account for the huge and persistent difference of redistribution observed between Europe and the United States.