Why do Redistributive Policies Differ across Countries? Analyzing the Multiple Dimensions of Preferences for Redistribution

Abstract

Why are some countries characterized by more income redistribution than others? Based mainly on Trans-Atlantic comparisons, the literature has referred to dissimilarities in preferences for redistribution. In this article, we extend this literature by focusing on multiple dimensions of redistributive preferences and adding Japan to the comparison. More precisely, using data for France, the US, and Japan from ISSP 2009, we apply cross-sectional regression models and the Blinder-Oaxaca decomposition technique to address two distinct questions about preferences for redistribution - the role of government in reducing income gaps and tax progressivity. We find that each of these dimensions are related to different mechanisms: i.e. one depends more on individuals' specific situations, such as income/wealth and social beliefs, as stressed in the literature, whereas the other depends more on an unobservable but common factor within a country, such as the historical and cultural background of each society.