Insurance and Redistribution: An Experimental Approach

The LIEPP's Socio-fiscal Research Group is glad to invite you to the lunch-seminar with Professor David Rueda:

• Friday, Avril 6th 2018, 12h30 am - 02h00 pm
• LIEPP seminar Room
• 254 bvd Saint-Germain, 75 007 Paris

David RUEDA

Professeur de Politiques Comparées, Université d'Oxford 

Professorial Fellow à Nuffield College

Abstract

Most distributive theories in political economy understand individuals to be motivated by material self-interest, often approximated by their current positions in the income distribution. It has become increasingly common, however, to also conceptualise material self-interest inter-temporally (as lifetime consumption/income). This approach extends the more direct focus on effects of contemporary relative income (as in Romer 1975 and Meltzer and Richard 1981) and opens the door to arguments about insurance and risk (as in Sinn 1995; Moene and Wallerstein 2003; Iversen and Soskice 2001; Rehm 2009; Mares 2003), and about social mobility and life-cycle profiles (Rueda and Stegmueller 2018; Alesina and Giuliano 2011; Haider and Solon 2006; Benabou and Ok 2001). Distinguishing between redistribution (in the present) and insurance (against something that could happen in the future), however, is empirically challenging. In this paper, we propose that the effects of insurance motivations on support for redistribution are income dependent. We distinguish our argument from other theoretical alternatives and explore its implications through a laboratory experiment designed to separate the influence of redistribution, insurance and altruistic motivations that we conducted through the Nuffield Centre for Experimental Social Sciences (CESS) in the United Kingdom and Chile.

Discussion

Emeric HENRY (Associate Professor, Département d'économie de Sciences Po)