Preferred Levels of Income Inequality in a Period of Systemic Change: Analysis of Data from the Polish Panel Survey, POLPAN 1988-2003

IntroductionResearchers have documented a substantial rise in income inequality across a number of diverse nations during the past half century (Gornick and Jantti 2013; Piketty 2014). Within the past decade, social scientists have produced a significant amount of research documenting the causal mechanisms (Piketty and Saez 2003) and social outcomes (Esping-Anderson 2007) involved in this escalation of economic inequality. Much less is known however about attitudes toward income inequality. While broader research on inequality preferences, redistributive justice, and meritocratic beliefs has a long history (Jasso and Rossi 1977; Rawls 1971), a number of methodological problems have prevented a more comprehensive understanding of attitudes toward inequality in particular. First, operationalizations of attitudes and policy preferences are weakly developed (McCall and Kenworthy 2009). Oftentimes, the kinds of questions available in nationally representative surveys are not sufficient to fully understand the complexity of redistributive attitudes and notions of ideal levels of inequality (McCall 2013). Second, researchers have seldom been able to use panel data to accurately assess the causal ordering of structural change and individuals' preferences. Finally, there has not been much research on the effects of contextual change, such as the economic and political transitions in Eastern Europe and Asia of 1989/1990, on individual attitudes (McCall 2013).In the current study, we seek to address these gaps and methodological challenges. Using the Polish Panel Study (POLPAN), we follow a set or respondents over a period of fifteen years, 1988-2003, during Poland's transition from central planning toward market economy, and track their changes in preferred levels of earnings inequality in society, measured as the ratio of just earnings of the owner of a factory to the just earnings of an unskilled worker. 1 Our goal is to determine how exactly the marked rise in economic inequality in Poland is affecting individuals' attitudes about societal disparities and what is considered just.Literature ReviewAttitudes toward Inequality and Social PsychologyDramatic rises in income inequality have created much scholarly interest in how populations are adjusting to increasingly unequal settings. For example, in the U.S. the ratio of CEO pay to that of a common laborer increased from 30 : 1 in the early 1970's to 100 : 1 in the 2000's (McCall 2013). Recent evidence from Piketty (2014) suggests that this pattern of economic divergence is likely to continue in the coming decades. How then do individuals respond to these substantial changes in the earnings distribution? How do attitudes toward inequality change as inequality itself changes?Perhaps the most perplexing finding about individuals' preferences about inequality is that studies notoriously refute one of the most straight-forward explanations. Tests of the median voter-hypothesis, or the idea that increasing market inequality will produce greater demand for redistributive generosity, have at best revealed mixed evidence (Brzezinski, Jancewicz, and Letki 2013; Kenworthy and McCall 2008). In fact, researchers seeking to explain how individuals are adapting to high levels of inequality have come up emptyhanded after analyzing levels of well-being, happiness, support for progressive taxes, etc. (McCall 2013). Indeed, McCall and Kenworthy (2009) and McCall (2013) demonstrate the complexity involved in understanding beliefs and preferences concerning inequality, opportunity, and redistribution. The best evidence in the U.S. context suggests that individuals do care about rising income inequality to the extent that inequality can itself be a restriction to opportunity (McCall 2013). Similarly, using data from the International Social Justice Project in Germany, Schneider (2012) emphasizes that what really matters to individuals is not the actual or perceived level of inequality, but rather the 'attributed legitimacy' of income inequality, especially as it is connected back to one's own well-being. …