Does income transparency affect support for redistribution? Evidence from Finland's tax day

Maurice Dunaiski and Janne Tukiainen
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Maurice Dunaiski: UNODC Research

No 159, Discussion Papers from Aboa Centre for Economics

Abstract: This paper examines whether income transparency - the public release of citizens' income information - affects support for redistribution. We leverage a quasi-experiment in Finland, where every year on the so-called tax day, the authorities release income information on Finland's top earners to the public. To identify causal effects we compare respondents who took part in the European Social Survey shortly before and after the event. We find that the tax day increases perceptions that earnings of the top 10% are unfair, but that public support for redistribution remains largely unaffected. A notable exception are top earners, who decrease their support for redistribution, and young people, who increase their support for redistribution. Our results highlight the scope conditions of previous experimental studies, and suggest that increasing exposure to inequality through a real-world policy, rather than experimental treatments, may trigger only marginal changes in support for redistribution.

Keywords: income transparency; inequality; redistribution; taxes (search for similar items in EconPapers)
JEL-codes: D31 D63 D72 D80 H20 H23 H24 H31 (search for similar items in EconPapers)
Pages: 93
Date: 2023-02
New Economics Papers: this item is included in nep-eur, nep-exp, nep-lma, nep-pbe, nep-pol and nep-pub
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