Social Positions and Fairness Views on Inequality
We link survey data on Danish people’s perceived income positions and views on inequality within various reference groups to administrative records on their reference groups, income histories, and life events. People are, on average, well aware of the income levels of their reference groups, but lower-ranked respondents in all groups tend to overestimate their own position among others because they believe others’ incomes are lower than is the case, while higher-ranked respondents underestimate their position. People view inequalities within co-workers and education group as most unfair, yet underestimate inequality the most exactly within these groups. Perceived fairness of inequalities is strongly related to current individual position, moves with shocks like unemployment or promotions, and changes when experimentally showing people their actual positions.
This paper is a substantially revised version of a working paper previously circulated under the title “Social Position and Fairness Views.” We thank Beatrice Ferrario, Leonardo D’Amico, Ida Maria Hartmann and Isabel Skak Olufsen for excellent research assistance. We are also grateful for comments by seminar participants in the Deaton workshop on Attitudes Towards Inequality and Redistribution, the Selten Lecture in Bonn, IFN in Stockholm, NHH in Bergen, LSE, UCSD, UC Berkeley, UCLA, the NBER Public Economics Meetings, and Zurich. We thank Ingvild Almås, Asger Andersen, Richard Blundell, Dietmar Fehr, Ernst Fehr, Søren Leth-Petersen, Andreas Peichl, Ricardo Perez-Truglia, Emmanuel Saez, Julien Senn, David Seim, Krishna Srinivasan, Bertil Tungodden, Andrea Weber, Roberto Weber, and Matthew Weinzierl for feedback and suggestions. The activities of CEBI are ﬁnanced by the Danish National Research Foundation grant DNRF134. We are also grateful for ﬁnancial support from the Candys Foundation. The use of the data for this project complies with Danish legislation (persondataforordningen, forordning 2016/679 om persondatabeskyttelse) and has been approved by the Danish Data Protection Agency (File No. 514-0018/2018-2000 at the University of Copenhagen). The project includes a randomized information treatment and was preregistered in the AER RCT Registry (AEARCTR-0003923). The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
- Survey data from Denmark, a very equal society, show that income inequality among individuals with similar education and in similar...