Evolution over time of the determinants of preferences for redistribution and the support for the welfare state

Abstract

[Abstract:] The objective of this article is to analyse the determinants of preferences for redistribution in Spain both at an aggregate and regional level. Using country level data, we put to the test the Alesina and Angeletos’ (2005) hypothesis, the strong and positive relationship between the ‘belief that luck determines income’ and the support for redistributive policies. As an innovative contribution, we contrast this hypothesis using a set of panel data models with regional and time fixed effects. Our main finding is the existence of a structural change in preferences formation for redistribution in Spain between 1995 and 2007. Furthermore, the empirical results provide some evidence suggesting that (1) the belief that society is unfair have a moderate effect on the individuals’ preferences for redistribution and (2) regional beliefs in Spanish regions are not equally important when determining demand for redistribution.