What does the size of redistributive policies depend on?
We measure the size of the redistributive policies of the various OECD countries by the gap between the Gini index of income inequality before and after redistribution. Comparing OECD countries, we seek to determine what determines the size of redistributive policies. This size can in principle be explained by: The level of income inequality before redistribution; Social mobility: low social mobility 1 leads to demands for greater redistribution; Whether or not a high tax burden can be accepted (Social Democrats versus Liberals); The visibility of inequalities and the existence of extreme income inequality. We see that the size of redistributive policies can apparently be explained by: The level of income inequality before redistribution; The social acceptability of generous social welfare and a high tax burden. Low effective social mobility is not significantly associated with a large size of redistributive policies, perhaps because it is perceived rather than effective social mobility that counts. 1 A. Alesina, S. Stantcheva, E. Teso (2018), “Intergenerational Mobility and Support for Redistribution”, American Economic Review, vol. 108, pages 521-554, show that it is the perception of social mobility that is most important in explaining the demand for redistribution.