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We study distributional preferences in larger “societies.” We conduct experiments via Mechanical Turk, in which subjects choose between two income distributions, each with seven (or more) individuals, with hypothetical incomes that aim to approximate the actual distribution of income in the U.S. In contrast to prior work, our design allows us to flexibly capture the particular distributional concerns of subjects. Consistent with standard maximin (Rawlsian) preferences, subjects select distributions in which the bottom individual’s income is higher (but show little regard for lower incomes above the bottom ranking). In contrast to standard models, however, we find that subjects select distributions that lower the top individual’s income, but not other high incomes. Finally, we provide evidence of “locally competitive” preferences—in most experimental sessions, subjects select distributions that lower the income of the individual directly above them, while the income of the individual two positions above has little effect on subjects’ decisions. Our findings suggest that theories of inequality aversion should be adapted to account for individuals’ aversion to “topmost” and “local” disadvantageous inequality.

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The Routine-Biased Technological Change (RBTC) has been called as a relatively novel technologybased explanation of social changes like job and wage polarization. In this paper we investigate the wage inequality between routine and non-routine workers along the wage distribution in Italy. Thanks to unique survey data, we can estimate the wage differential using both actual and perceived level of routine intensity of jobs to classify workers. We adopt semi-parametric decomposition techniques to quantify the importance of characteristics of workers in explaining the gaps. We also employ nonparametric techniques to account for self-selection bias. We find evidence of a significant U-shaped pattern of the wage gap, according to both definitions, with non-routine workers earning always significantly more than routine workers. Results show that workers' characteristics fully explain the gap in the case of perceived routine, while they account for no more than 50% of the gap across the distribution in the case of actual routine. Thus, results highlight the importance of taking into account workers' perceptions when analyzing determinants of wage inequality. Overall, we confirm that, after leading to job polarization, RBTC induced a similar polarizing effects on wages in Italy.

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