parties are strongest when the parties are younger. Moreover, we provide supportive evidence on the mechanisms underlying these arguments using entirely different data on taxation. Stein and Caro (2013) find that left-wing governments tax more. We find the same, but also show that the effect is substantially and significantly attenuated in the presence of older left-wing parties.<sup>7</sup>

# **2. Data – Income distribution, redistribution and political variables**

# Income data

Much of the early research analyzing inequality and redistribution yielded ambiguous evidence for the claim that higher inequality is associated with greater redistribution, as Meltzer and Richard predicted. Research findings from Alesina and Rodrik (1994) to Mahler (2008) were supportive, but evidence in Easterly and Rebelo (1993), Perotti (1996), and Bassett, Burkett and Putterman (1999) were either more ambiguous or flatly contradictory. However, this research was based on the distribution of _disposable_ incomes to test their claims. Disposable incomes, however, already include the effects of governments’ redistributive policies. Theoretical claims linking inequality and redistribution focus, however, on _pre-redistribution_ or _market_ incomes. Economic actors decide on preferred government fiscal policy on the basis of their market incomes. The resulting policies determine their disposable incomes and disposable income distribution.

One major contribution of this study is, therefore, the use of a large new database giving the distribution of market, gross and, to a lesser extent, disposable incomes for 61 countries and 386 country years. From these data, for most estimations, we are able to use approximately 56 countries and 320 country years.

The left-hand side variable – the amount of income redistribution – posed an additional challenge to early research on inequality. Researchers measured redistribution based on government spending in particular categories of public expenditure. However, these categorizations are ambiguous about the ultimate beneficiaries: aid targeted specifically to the poor could be a small fraction of total government transfers from which the poor benefit, but the distribution across income groups of broader transfer programs is usually unknown.

To address these data shortcomings, researchers began to use data from the Luxembourg Income Study (LIS) (for example, Milanovic 2000, 2010; Iversen and Soskice 2006; Shayo 2009 and Scervini 2009). LIS data allow researchers to calculate household market incomes (before taxes and transfers), and to measure redistributive government policies as the difference between market incomes and disposable (post-taxes and transfers) or gross income (post-transfers only). The LIS, however, covers a relatively small number of consolidated democracies (currently 32, allowing for 138 yearly observations).

We found household surveys from 29 additional countries that use the same definitions of income as LIS. These include 20 countries and 200 observations from Latin America (from

> 7 Scholars have also considered the effect of institutional arrangements on inequality.  For example, Ardañaz and Scartascini (2013) show that personal income taxation is lower in countries where some electoral districts have a significantly higher number of legislative seats, relative to their population, than others (countries with malapportioned legislatures).

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