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 The change in the connection between education and party--a shift of educated voters towards the Democrats and less educated voters towards the Republicans--has received a lot of attention.  One popular view is that working class voters have moved away from the Democrats because the party no longer pays attention to their economic interests.  Writing in the New York Times, Pamela Paul says "When it comes to economics, the authors say, Democrats have too often pursued the interests of their own elites and donors. Since the 1990s, the party has pursued policies that worsen the economic plight of Americans who are not well off."  However, although you can find examples that arguably support this analysis, if you look at spending on a range of social programs, the idea that the Democrats have stopped trying to help people with low and moderate incomes doesn't hold up:  see this post.  A new paper by Ilyana Kuziemko, Nicolas Longuet Marx & Suresh Naidu offers a more promising idea:  that education affects relative support for "predistribution"--policies designed to affect jobs and wages--versus "redistribution."  Less educated people tend to favor predistribution, while more educated people favor redistribution, so as educated people have come to have more influence in the Democratic party, policies have shifted towards redistribution.  Thus, although they are still trying to help the working class, they're doing it in a way that has less appeal to the working class.  As an example of the effect of education on different kinds of opinions, here is the percent of college graduates and others who take the liberal position on some questions from a 2015 CBS News/NY Times survey:           Not grad grad    DifferenceTax stock transactions 35 39        4Tax million incomes     69 69      0sick leave          86 85       -1caregiver leave 83 79       -4Union power         45 40      -5trade restrictions         69 64         -5Minimum wage $15         40 35         -5Minimum wage $10     75 69          -6limit CEO pay         56 45       -11schedule notice 78 66       -12Distribution fair 75 63        -12Positive numbers in the "difference" column mean that college graduates are more liberal than less educated people; negative numbers mean they're more conservative.  Most of the figures are negative, but if you look more closely there's a pattern--more educated people are equally or more liberal when it comes to raising taxes on people with high incomes, but more conservative on things that involve direct regulation.  The biggest difference ("schedule notice") is for a question about whether hourly workers should be given two weeks notice of any change in hours worked or compensated with overtime pay.* None of the differences are especially large, but they are consistent, so they can contribute to a general image of the parties.  I think that their analysis explains at least part of the shift in party support, and I've made a similar but less systematic account in this paper, although I think that the effect of education on economic opinions has also shifted in a liberal direction--definitely on redistribution, but probably on predistribution as well.  Finally, there's a question of whether the shift led to a change in overall support for the parties?  A New York Times article by Peter Coy on the Kuziemko et al. paper says it does--the title is "How Democrats Lost Voters With a 'Compensate Losers' Strategy."  But the paper doesn't actually discuss this issue, and in principle it could go in either direction--the gains among educated voters could be bigger, smaller, or equal to the losses among less educated voters.  I'll discuss this point more in a future post, but at this point I'll just observe that the assumption that this shift is bad for the Democrats is revealing in itself--there is now a general idea that it's better to appeal to the "working class" than to "elites."  So Democrats worry about the shift, while Republicans are proud of it.[Data from the Roper Center for Public Opinion Research]* I take support for trade restrictions as the liberal position.  In addition to the policy questions, I also show the results for a question on whether the overall distribution of income is fair.  

This article analyzes the circumstances under which conflict leads to the outbreak of war using a formal model which incorporates both the redistribution of resources as an alternative to war and imperfect information. Countries act as rational agents concerned with both consumption and the public bad of a war. In the first period both countries can either consume or build arms, whereas in the second period there can be either the threat or the use of force to reallocate resources. If both countries are fully informed, then there will be no war but rather a voluntary redistribution of resources. In a situation of asymmetric information, however, in which one country is fully informed and the other is not, a war can occur if the uninformed country uses a separating equilibrium strategy, precommitting itself to a positive probability of war in order to prevent bluffing by the informed country.

Democratic presidential candidates, including Hillary Clinton and Bernie Sanders, along with progressive economists like Thomas Piketty and Paul Krugman, have made a case for redistributing income from the wealthy to the poor as a means of reducing inequalities in income and wealth. Meanwhile, public opinion polls show that voters reject programs of redistribution in favor of policies designed to promote overall economic growth and job creation. While voters are concerned about inequality, they are more skeptical of the capacity of the government to do anything about it without making matters worse for everyone. In this Broadside, James Piereson explains why the voters are right and the progressive politicians and economists are wrong. As he demonstrates, the progressive case is based upon a serious fallacy: it assumes that the government is actually capable of redistributing income from the wealthy to the poor. For reasons of policy, tradition, and constitutional design, this is not the case. The United States currently has one of the more progressive income tax systems in the industrial world but it does little to redistribute income from the wealthy to the poor. One reason for this is that, though the government spends vast sums on programs to aid the poor, most of these funds flow to providers of services rather than to the poor themselves. Thus, whatever one may think of inequality, redistributive tax and spending policies are unlikely to do much to ameliorate it but will instead line the pockets of providers and advocates who wield great influence in Washington

How can we evaluate the redistributive effect of welfare states? Do tax and transfer systems reduce the level of inequality generated in the market? In order to answer these questions, we need to be equipped with adequate measures of redistribution. Current measures employed in the sociology and politics of redistribution are seriously flawed. This paper elaborates the reasons why we cannot rely on those measures. Furthermore, it develops a framework to statistically identify redistribution as a micro-level income mobility process, and develops an index to measure it. Using data from the Luxembourg Income Study, the paper shows that the new measure of redistribution developed in this paper is empirically distinct from the conventional measures that have been used in the literature. The paper concludes by demonstrating the importance of the new measure of redistribution for improving our understanding of the social and political determinants of redistribution. In particular, it shows that the conventional wisdom in the political economy of redistribution does not hold in the light of the new measure developed in this paper.

Different beliefs about the fairness of social competition and what determines income inequality influence the redistributive policy chosen in a society. But the composition of income in equilibrium depends on tax policies. We show how the interaction between social beliefs and welfare policies may lead to multiple equilibria or multiple steady states. If a society believes that individual effort determines income, and that all have a right to enjoy the fruits of their effort, it will choose low redistribution and low taxes. In equilibrium, effort will be high and the role of luck will be limited, in which case market outcomes will be relatively fair and social beliefs will be self-fulfilled. If, instead, a society believes that luck, birth, connections, and/or corruption determine wealth, it will levy high taxes, thus distorting allocations and making these beliefs self-sustained as well. These insights may help explain the cross-country variation in perceptions about income inequality and choices of redistributive policies.

This paper uses pseudo panel techniques and a fixed effects estimator to analyse the determinants of preferences for redistribution in 34 European countries over the period 2002-2012. The data is drawn from the six available waves of the European Social Survey. The main result is that changes in income inequality positively affect changes in preferences for redistribution over time. Though this result is predicted by standard political economy models, it has found little previous empirical support. This study shows that, at least in Europe, growing income inequality leads to more individual support for redistribution. The empirical results hold after performing a variety of robustness checks regarding the construction of pseudo panels, the use of lags and different measures of income inequality.

his paper surveys models of voting on redistribution. Under reasonable assumptions, the baseline model produces an equilibrium with the extent of redistributive taxation chosen by the median income earner; if the median is poorer than average, redistribution is from rich to poor. Increasing inequality increases redistribution. However, under diŽerent assumptions about the economic environment, redistribution may not be simply rich to poor, and inequality need not increase redistribution. Several lines of argument are presented, in particular, political participation, public provision of private goods, public pensions, and tax avoidance or evasion.

Should education be subsidized for the purpose of redistribution? The usual argument against subsidies to education above the primary level is that the rich take up most education, so a subsidy would increase inequality. We show that there is a counteracting effect: an increase in the stock of human capital reduces the return to human capital and, therefore, pre-tax income inequality decreases. We consider a Walrasian world with perfect capital and insurance markets. Hence, in the absence of a strive for redistribution, the market generates the efficient level of investment in human capital. When there is a demand for redistribution, the general equilibrium effects on relative wages might make a subsidy to education an ingredient of a second-best optimal redistribution policy. Stimulating human capital formation results in a compression of the wage distribution, and hence reduces the need for distortionary redistributive taxation. We also study the political viability of education subsidies.