Should income inequality be reduced and who should benefit ? redistributive preferences in Europe and Central Asia

This paper examines support for reducing inequality and for income redistribution to specific groups in Europe and Central Asia. The paper uses the Life in Transition Survey to analyze cross-country differences in redistributive preferences and the determinants of individual-level differences in such preferences. The analysis tests for various possible motivations, such as self-interest, beliefs about the fairness of the income-generating process, past social mobility experience, or expectations of future social mobility. Fewer people wanted to reduce the gap between the rich and the poor in 2010 than in 2006 in transition countries. Support for redistribution toward specific groups is highest for the disabled and the elderly, but there is high heterogeneity across countries in support for various redistributive policies, as well as in the alignment between average beliefs and actual policies. The empirical analysis confirms the importance of beliefs about fairness in influencing redistributive preferences, together with self-interest and past and expected social mobility in European Union member states (Western European and new member states), but only to a limited extent in the non-European Union member state group of transition countries. Regarding redistribution to specific groups, self-interest appears to be an important motivation for support for the elderly and families with children, whereas values and beliefs are important drivers of support for the working poor and the unemployed. Although framing matters, the results are broadly robust to alternative measures of support for reducing inequality.