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Income inequality and demand for redistribution in Latin America, from 1997-2015

Abstract:

Why in some countries is there more redistribution of income than in others? The issue is relevant, not only for the design of taxation systems and redistributive policies, but also for a better understanding of the emergence of social conflicts or the general tolerance of the population to situations of social inequality. The literature, centered on studies of developed countries, points out that the so-called "preferences for redistribution" depend on numerous factors, both macro and microeconomic. In this article, data from three different sources are combined to estimate a multilevel model with stacked data and a pseudo-panel, in order to analyze the effect of income inequality on the demand for redistribution in Latin America. The results show that the probability of support for redistributive policies increases in countries or historical moments marked by higher inequality, and also indicate that the Latin American poor are increasingly demanding more egalitarian societies.