The Tradeoff between Redistribution and Effort: Evidence from the Field and from the Lab

Abstract

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Disincentives from redistribution: evidence on a dividend of democracy

“…Most and least productive subjects do not show significantly different behavior, neither in phase 1 nor in phase 2 (all p > 0.1, WRS; diff-in-diff: p = 0.403), suggesting that also the least productive subjects exerted significant amounts of costly overwork, making it highly implausibly that subjects were motivated by inequality aversion. In that sense our finding is in line with Buch and Engel (2012) who also investigate such inequality effects, but do not find empirical support.…”

Risk Attitudes and Preferences for Redistribution: New Evidence from the Lab

“…In our experimental setting, such cost was interpreted as a time-consuming activity that required some ability to be performed. The effort task chosen here was proposed, e.g., by Buch and Engel (2012) and has the appealing feature of being easy to administer in a paper-andpencil experiment, but also complex enough to require people to exert real effort in order to perform it. It consisted in finding how many couples of numbers added up to 10 in 4x4 tables, an example of which is represented in Table 2.…”

“…Each table had at least one couple adding up to 10, and at most four. The size of the tables was chosen in order to make the task as challenging as possible, and 4x4 was the maximum size presented to subjects in Buch and Engel (2012). In order to allow subjects to correctly understand the task and their abilities in solving the exercises, first, subjects were given ten minutes to practice over the task with 10 tables.…”