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Redistribution in Whose Favor? Preferences with Regard to Nationality and Type of Beneficiaries

Neustadt, Ilja and Zweifel, Peter (2023): Redistribution in Whose Favor? Preferences with Regard to Nationality and Type of Beneficiaries.

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We elicit preferences for the allocation of public budget to groups of recipients through a discrete choice experiment performed with a representative sample of Swiss citizens. The total desired amount of income redistribution as a share of GDP and its allocation across groups of recipients are related to a citizen's income tax as a share of disposable income. We estimate citizens' willingness-to-pay values in favor of recipients' types (old-age pensioners, people with ill health, the unemployed, working poor, and families with children) and their nationalities (Swiss, citizens of Western European countries, citizens of other countries). The 'pocketbook' view that respondents demand redistribution in favor of their own group is confirmed for families with children, only partially confirmed for the unemployed and people with ill health but rejected for old-age pensioners. The view of income redistribution as a way of insurance against risks received substantial empirical support. Swiss citizens exhibit a positive willingness to pay in favor of themselves or Western European citizens to the detriment of citizens of other countries, who are perceived to be culturally distant.

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