How perceived social mobility affects
preference for redistribution
A comparison between France, Japan, and the United States

Maria Roubtsova(with S. Lechevalier & E. Yamamura)
Doshisha University, 2013/7/26
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1. Motivation & contribution

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Dissatisfaction with inequalities and preferences forredistribution
a link that is not so straightforward From preference for redistribution to policies
 From inequality to preference for redistribution
 A part of preference for redistribution seems tostem from dislike of inequality, risk-aversion etc.
But there remains an unexplained part. Whatmay explain the gap?

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Social mobility (table from Piketty 1995)

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Interpretation
At the micro level, one's social trajectory
seems to influence one's opinion concerning
redistribution● This link can be further investigated●5Link with the Doshisha Research Program onhappiness Parts 3 (inequality) & 1 (social system): Effects ofeconomic inequality on happiness and influence ofsocial security on happiness Definition of the role of government: exploring the link

between inequality, dislike of inequality, preference
for redistribution and redistribution on happiness...

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Questions at the origin of this research

●

●

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At the micro level, how one's past experience andsocial trajectory affects one's preference forredistribution?
Does an experience of upward and downward social
mobility affect one's preference differently? Is the effectof inter and intra-generational mobility the same?
Is the effect heterogenous in different developedcountries?
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Chart (data from ISSP 2009 and OECD website)8Why comparing France, Japan, and the US?

●●●

Same Gini before tax (0.49) in 2009
Different levels of redistribution and preference forredistribution
3 developed countries with similar HDI but different
cultures and histories

9Preference for redistribution and actual
redistribution (macro level)

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Content of today’s presentation


1. Motivation and contribution
2. Social mobility and preferences for redistribution: some theoretical insights

3. Stylized facts of the comparison between J, F, and the US (+ presentationof the dataset)

4. Hypotheses and empirical strategy



5. Preliminary results

6. Conclusions and next steps
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2. Social mobility and preference forredistribution: some theoreticalinsights

12Literature review: overview●General determinants of preference forredistribution at an individual level

●

POUM

●

Piketty's learning model●

What about France, Japan and USA inempirics?
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General determinants of preference forredistribution at an individual level●●●

Usual socio-demographic controls: income status, age, gender,
race, religion...
«Holistic» or cultural level: dislike of ineaquality; estimation of«incentive cost» of taxation...
Individualistic determinant: maximizing one's life-cycle income,basic model by Meltzer and Richards 1981 (but usually strong
correlation with current income status though). So social mobility
perspectives are a component of the decision process, and they
are potentially affected by mobility experience.
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The POUM (Bénabou and Ok 1998)
●

●●

●

As usually the median is below the mean of incomes, why
does the median voter not choose complete equalization ofincomes?
Hypothesis: because of the Prospect Of Upward Mobility
Observation: actually in the USA, 51% of people earn on
their life-time more than average (median above the mean)
Therefore Prospect Of Upward Mobility is a good candidate
to explain a part of the preference for redistribution

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Past experience and political preference(Piketty 1995)●●

Basic observation: people's votes are correlated with their parents'status. Thus past experience seems to influence one's vote.
Theoretical model: in society, achievements are functions of effort andluck. All citizens tend to agree that «efforts should be rewarded»●

But nobody has knowledge of the «true» parameters of effort and luck●

So people estimate them according to the trajectory of their «dynasty»●

The predictions of Piketty's model are consistent with the data16

Comparison between France, Japan andthe USA●●«Objective» level of social mobility tend to be close between
USA and France (Fields and Ok 1999). However, perceived
social mobility is much higher in the USA (Alesina et al. 2004)
which might explain lower taste for redistribution.
Ohtake and Tomioka (2004) find that in Japan perceived
change in social mobility (as measured by «do you think thata lot of poor got rich or rich got poor ?») has no significant
impact on preference for redistribution. In contrast, aperceived increase in general poverty has a strong positive
impact.
173. Stylized facts of the comparisonbetween J, F, and the US (+presentation of the dataset)

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Dataset: ISSP 2009●

●Questionnaire conducted in 2008 in a set ofcountries. Subjective data, theme of Social
Inequality
ISSP is conducted every year but subjects
change. There exist previous issues oninequality but ISSP is not a panel so weconcentrate on 2009 issue.
19Note on what is to perceive more mobility «A more mobile society» (both upward anddownward) Versus «more upward social mobility»
 Two meanings, often considered as the same inthe literature, but we should be careful as weenvisage downward social mobility
20Perception of a mobile society and preference
for redistribution

USAJapan

FranceFor getting ahead 62.66
in life, coming froma wealthy family isessential/very/fairl
y important (%)

52.42

38.94

It is government's 32.63
responsibility toreduce differences
in income, strongly
agree/agree (%)

54.36

77.23

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Comments●The hierarchy in the preference for redistribution
reflects the hierarchy in «objective» redistribution(USA < Japan < France). However, the hierarchy inthe perception of a mobile society, where one’sachievements do not depend on their parents’income, is reversed: Americans are more likely tothink one’s parents’ income is important than theJapanese, who are more likely to say so than theFrench. This is puzzling.
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Comments●●●

Overall, it seems that in the USA, the people who think society ismobile are those who are less likely to prefer redistribution (andvice-versa).
In Japan also, the results are not surprising: the people who thinksociety is mobile seem to be more likely to oppose redistribution.
In France though, the correlation seems to exist, but the striking
fact is that even the people who think «coming from a wealthyfamily is not important at all» tend to be in favor of redistribution!

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Note: social mobility compared in France, Japanand the US
However, a comparison of intergenerational transmission ofincome and education in Japan and in France- which uses
comparable surveys between the mid-1960s and the mid2000s shows that intergenerational income and education
mobility is much higher in Japan than in France (Lefranc,Ojima & Yoshida, 2008).
► Subjective/objective mobility are not necessarily
completely correlated
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Individual's trajectory and preference forredistribution in the USA(France and Japan tables are in appendix)

Government’s responsibility
to reduce inequalities

Stronglyagree

Agree Neither
agree
nor
disagreeDisagree Strongly Total
disagreePosition higher than father’s 8.36

26.97

15.46

28.39

20.82

100

Position lower than father’s

6.99

22.80

17.62

33.94

18.65

100

No mobility or irrelevant

7.99

23.36

15.78

33.40

19.47

100

Total

7.89

24.73

16.11

31.43

19.83

100 25

4. Hypotheses and empirical strategy

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Deriving the hypotheses from the theoretical
literature and the stylized facts

At an individual level but potentially in different ways
among the 3 countries●How does the experience of upward/downward mobility
affect preference for redistribution? (idea of a «dynastic»
learning process, inspired by Piketty)

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Empirical strategy and issues


Subjective data, prone to endogeneity bias

Conducting regressions of preference for redistribution (degree ofagreement, on a scale from 1 to 5, to It is government's responsibility to
reduce differences in income)Set of usual controls (age, gender, income, assets)

Explanatory variables: experienced social mobility (use of 2 different
questions from ISSP for robustness check)In order to address endogeneity bias, instruments for 2SLS: numberof books at home during childhood, and father's job
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5. Results(see appendix for some full regression tables)29

Regression 1 (exploratory OLS) :●●●Y : Preference for redistribution (Government should
reduce differences in income, from 1 to 5)
Explanatory variable : individual's self-assessed position
from 1 to 10 in society, minus his parents' (captures selfassessed mobility ; an increase measures upwardmobility)
Controls : age, sex, income quartile dummies,
debt/stock dummies (measuring assets), marital status,
region dummies, type of job
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Results 1: coefficients on « social mobility »variable●

France : -0.003 (p = 0.84)●

Japan : -0.18 (p = 0.595)●

USA : -0.235 (*)●

Only US coefficient is significant (10% level only)●

However this is endogenous, so we introduced an instrument31Regression 2 (2SLS)

●

●

●

●

Y : Preference for redistribution (Government should reduce
differences in income, from 1 to 5)
Explanatory variable : individual's self-assessed position from 1 to 10
in society, minus his parents' (captures self-assessed mobility ; anincrease measures upward mobility)
Instruments : number of books at home and father's type of job
when respondent was 15
Controls : age, sex, income quartile dummies, debt/stock dummies(measuring assets), marital status, region dummies, type of job

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Result 2 (2SLS) : coefficient on social mobility
variable●

France : 0.345 (***)●

Japan : -0.186 (p = 0.506)●

USA : -0.95 (p = 0.394)●

So the result is significant only for France, and effect ispositive, but the interpretation is challenging (people whobenefited from school trust government and publicgoods?)
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Regression 3 (2SLS) : « absolute value of mobility »●●●Same Y, same controls, same instruments
Explanatory variable : this time we measure « absolutevalue » of social mobility, that is to say the scope of the intergenerational movement
We try to see whether what matters is not « upward » or« downward » mobility, but experience of any mobility

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Regression 3, results : coefficient on « absolutevalue of experienced mobility »●France : 0.809 (***)●

Japan : 0.553 (p = 0.561)●USA : -0.393 (p = 0.274)●Again, France is the only country where the coefficient issignificant, and it is positive. The interpretation is evenmore challenging.

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6. Conclusions and next steps

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Conclusion

There seems to be a link between
experienced social mobility and one's
preference for redistribution in France. At thispoint, we cannot see a significant effect inJapan and the USA.
● However, the positive coefficient in France ishard to interpret●37Next steps●●To put it crudely, revise the 2SLS regressions tofind something significant for Japan and the USA(changing specification, adding different sets ofcontrols...)Find interpretations for the different impacts ofthe perception of mobility, in particular thepositive sign in France38

References

Alesina R. Di Tella R. & R. MacCulloch, Inequality and Happiness: areEuropeans and Americans Different? Journal of Public Economics (2004) 88:
2009-2042.
Alesina, A., & Giuliano, P. (2009) ‘Preferences for redistribution’, NBER
Working Papers n° 14825.
Bénabou R. & Ok E.A., Social Mobility and the Demand for Redistribution:
the POUM hypothesis, NBER working paper No. 6795, November 1998, JEL
No. D31, D72, P16, H20
Clark, A., & D’Angelo E., Upward Social Mobility, Wellbeing and Political
Preferences: Evidence from the BHPS. Working paper, Paris School ofEconomics, 2009 (17 October).

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References
●
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Fields, G.S. and E.A. Ok. Measuring Movement of Income. Economica (1999) 66, 455- 472.
Lefranc A., Ojima F. & Yoshida T. (2008), The intergenerational transmission of income andeducation: a comparison of Japan and France, EUI Working paper RSCAS 2008/25
Meltzer A.H. & Richard S.F., A Rational Theory of the Size of Government, Journal of PoliticalEconomy, Vol. 89, No. 5 (Oct., 1981), pp. 914-927
Ohtake F. and J. Tomioka (2004), Who Supports Redistribution?, The Japanese Economic
Review 55 (4): 333-354
Piketty T., Social mobility and redistributive politics, Quarterly journal of economics, vol. 110,
no 3, 1995, p. 551-584.
Sato Y. (2010), Stability and increasing fluidity in the contemporary Japanese social
stratification system, Contemporary Japan 22: 7-21
For some data: stats.oecd.org.

40Thank you for your attention
Maria Roubtsova

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Appendix

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Table 1: Inter-generational mobility and preference
for redistribution, Japan

Stronglyagree

Agree Neither
Disagree Strongly
agree nordisagree
disagree

Total

Position higher than father’s

23.77

27.80

28.25

9.42

10.76

100

Position lower than father’s

28.74

29.31

29.12

6.90

5.94

100

No mobility or irrelevant

22.27

29.26

29.04

9.17

10.26

100

Total

25.35

29.01

28.93

8.23

8.48

100

Government’s responsibility
to reduce inequalities

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Table 2: Inter-generational mobility and preference
for redistribution, France

Government’s responsibility
to reduce inequalities

Stronglyagree

Agree Neither
Disagreeagree nordisagreeStronglydisagree

Total

Position higher than father’s

49.35

27.23

13.07

7.83

2.51

100

Position lower than father’s

51.61

24.86

14.61

6.64

2.28

100

No mobility or irrelevant

52.08

26.69

11.51

7.24

2.49

100

Total

50.62

26.61

12.89

7.42

2.46

100
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Table 6 : IV upward mobility, France45

Table 7 : IV upward mobility, Japan46

Table 8 : IV upward mobility, USA47