CEP LSE RSS Contact Us YouTube Facebook Twitter

Abstract:

cover
CEP Discussion Paper
Spend It Like Beckham? Inequality and Redistribution in the UK, 1983-2004
Andreas Georgiadis and Alan Manning
August 2007
Paper No' CEPDP0816:
Full Paper (pdf)

JEL Classification: H20; D72


Tags: taxation; inequality; redistribution

A main activity of the state is to redistribute resources. Models of the political process generally predict that a rise in inequality will lead to more redistribution. This paper shows that, for the UK in the period 1983-2004, a plausibly exogenous rise in income inequality has not been associated with increased redistribution. We then explore this further using attitudinal data. We show that the demand for redistribution, having shown considerable variation over time, is at an all-time low. We argue that the decline in the demand for redistribution can mostly be accounted for by an increasing belief in the importance of incentives though changes in preferences over the distribution of income have been important in some sub-periods.