The rise of income and wealth inequality and the uneven distribution, across European countries, of gains and losses from the recovery from the Great Recession appear to have undermined the political support for the European Welfare States. The rise of populist propaganda, the rapid shift in policy agendas towards severe austerity measures in the aftermath of the recession, alongside the recent migration crisis, has made it clear that traditional visions of the Welfare State are being deeply challenged and may not be suitable anymore to cope with emerging inequalities, both real and perceived.
Little is known, however, on the mechanisms explaining how support for the Welfare State changes in response to a rise in 'inequality'.PREFER-ME will study individual attitudes towards government intervention and preferences for redistribution in the population as elicited in survey questionnaires. A quickly developing empirical literature has explored the implications of income and income inequality on preferences for redistribution. Recent studies have shown contrasting effects of market income inequality on preferences for redistribution, and highlighted that self-centered concerns, insurance motives and altruistic considerations might all play a role, with possibly different offsetting effects on preferences for redistribution. Experimental evidence has tried to isolate the effects of altruism by focusing on unfair inequalities originated from factors beyond individual control (such as their background of origin), although evidence remains so far confined to the lab. Little has been done to identify insurance motives that can be related to the role of wealth on preferences for redistribution.
Building upon this research, and exploiting both existing cross-national survey data and a new, original data collection for the Greater Region around Luxembourg, the objective of PREFER-ME is to bring new evidence on the implications of exposure to different forms of inequalities on the preference for redistribution of Europeans citizens, and to test hypothesis on the underlying mechanisms and motivations. First, we will focus on market income inequalities. Second, we will advance on the implications of unfair inequality on preferences for redistribution. Our third contribution will be the first attempt to establish connections between characteristics of wealth portfolios and government support, by recognizing the importance of past and future individual income history.