Abstract

Joint seminar LISER - University of Luxembourg

Co-authored by: Arvid Lindh (Swedish Institute for Social Research Stockholm University) and Leslie McCall (Stone Center on Socio-Economic Inequality, The Graduate Center, City University of New York)

Abstract

Disposable income in advanced economies is comprised overwhelmingly of labor compensation, and pay-setting institutions are crucial determinants of labor market inequality. Yet, studies of popular preferences for reducing inequality focus almost exclusively on support for redistribution through the tax and transfer system. We argue that this focus downwardly biases measurement of redistributive preferences among Americans, and, accordingly, we propose an expanded framework that includes preferences for reducing labor market inequality. Based on results from five high-quality surveys, fielded in the U.S., Sweden, and Denmark, and incorporating original and experimental data, we find that Americans are distinguished by their favorable views toward redistribution in the labor market and not by their opposition to inequality-reducing policies of all kinds. Our evidence is inconsistent with key tenets of American exceptionalism and free market ideology, and points toward the theoretical importance of market inequalities in discussions of the popular politics of inequality and redistribution.