Centre for Decision Research and Experimental Economics

CeDEx 2016-18: Labor Market Participation, Political Ideology and Distributive Preferences

Labor Market Participation


Using a political-frame-free lab-in-the-field experiment, we investigated the effects of employment status and political ideology on preferences for redistribution. The experiment consisted of two parts. During the first part the subjects worked for cash. During the second part they made decisions about whether and how their within-experiment incomes should be redistributed. The redistributive decisions of ¼ of the subjects (randomly selected at the end of the experiment) determined the amount of money they and the others took away from the experiment. In one treatment, the incomes depended on productivity during the first part of the experiment, ie they were earned. In the other treatment, the subjects' incomes were comprised of a small fixed payment for the first part of the experiment plus a randomly determined windfall. In accordance with many of the survey-based studies focusing on the same issue, we found that being employed or unemployed affected revealed redistributive preferences, while the political ideology of the employed and unemployed did not. In contrast, the revealed redistributive preferences of the students were strongly related to their political ideologies. The employed and right-leaning students redistributed earnings less than windfalls. The unemployed and left-leaning students made no such distinction. We conclude that, when people have yet to be exposed to the sometimes harsh realities of the labour market, their redistributive preferences depend on their political ideology but, once they are exposed, the effects of those realities overrule their ideology.

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Simona Demel, Abigail Barr, Luis Miller and Paloma Ubeda


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Posted on Tuesday 13th December 2016

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