07.07.2025Social Preferences and Redistributive Politics

Why do some people support taxing the wealthiest, while others prefer increasing subsidies for the underprivileged? How can economics help explain these different views on taxation and redistribution? A recent study by Ernst Fehr and Julien Senn from our department explores this central question. Specifically, they examine the link between social preferences, the extent to which individuals care about the well-being of others, and support for different redistributive policies.

Switzerland as a laboratory

Switzerland’s direct democracy provides a unique setting to study policy preferences. Using an online experiment with a sample broadly representative of the Swiss population, the researchers measured public support for four strongly redistributive policy proposals: a “minimum wage” initiative, an initiative aimed at capping top salaries, an initiative aimed at introducing a “fairer” tax schedule, and an initiative aimed at introducing an unconditional basic income. These measures allow the researchers to assess support for redistribution in their sample.

Mapping People’s Social Preferences

To measure social preferences the researchers used a series of economic games (dictator games) in which participants have to allocate money between themselves and other individuals. This experimental task allows the researchers to assess the extent to which individuals care about the well-being of others when making decisions that involve others. They then applied a novel clustering algorithm to identify behavioral “types”: clusters of individuals who behave in a similar way. This technique allowed them to identify three distinct preference types with a clear behavioral interpretation: Around 50% of the respondents were classified as inequality-averse: they have a strong distaste for inequality and are willing to pay to reduce it. 35% were found to be driven by altruistic motives: they show a willingness to help the worse off, but are not willing to pay to take away money from those better off. The remaining 15% displayed predominantly selfish behavior.

How do Preference Types Predict Support for Redistribution?

To what extent to the behavioral types identified predict support forredistributive policy proposals? The authors find a very strong and consistent link between social preferences and political support for redistribution. While people with higher incomes are generally less supportive of redistribution than those with lower incomes, the authors found that social preferences largely mitigate this negative relationship between income and support for redistribution. Specifically, they found that inequality averse and altruistic individuals are much more supportive of redistribution, particularly at higher incomes, than individuals identified as being predominantly selfish.

The Role of Meritocratic Beliefs

The study also shed light on how individuals’ meritocratic beliefs—the extent to which people believe that luck or effort is a key driver of individual success—shapes attitudes toward redistribution. While previous research highlighted that these beliefs are an important determinant of support for redistribution, this study showed that their influence hinges on whether individuals have social preferences or not. Specifically, meritocratic beliefs are a significant predictor of support for redistribution only among individuals who have social preferences (i.e., the inequality-averse and the altruistic individuals), but they have little to no impact among the predominantly selfish individuals.

How Policy Design and Communication Matter

Another important takeaway from the study is that the way redistributive policies are framed can shape public support. People who strongly oppose inequality tend to favor policies that are framed in terms of “taking away from the rich”, e.g., by increasing taxes on the wealthiest or capping the salaries of top earners. Altruistic individuals, on the other hand, tend to be less supportive of such initiatives. This distinction has therefore possible practical implications for political communication. For example, if a party seeks to appeal to voters concerned primarily with inequality, it may gain more traction by promoting tax-the-rich initiatives. Conversely, efforts aimed at a broader altruistic base might prioritize public policies that support the disadvantaged without aiming wealth reduction, instead focusing on policies that provide subsidies for the underprivileged.