DP13773 Disincentives from Redistribution: Evidence on a Dividend of Democracy
|Author(s):||Rupert Sausgruber, Axel Sonntag, Jean-Robert Tyran|
|Publication Date:||June 2019|
|Keyword(s):||disincentive effect, Lab Experiment, Legitimacy, Real effort task, redistribution, voting|
|JEL(s):||C92, D31, D72, H23|
|Programme Areas:||Public Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=13773|
We experimentally study the disincentive effect of taxing work and redistributing tax revenues when redistribution is imposed vs. democratically chosen in a vote. We find a "dividend of democracy" in the sense that the disincentive effect is substantially smaller when redistribution is chosen in a vote than when it is imposed. Redistribution seems to be more legitimate, and hence less demotivating, when accepted in a vote.