Governments around the world engage in income redistribution, taxing those with high incomes and transferring money to those with low incomes. The extent and popular support for income redistribution vary widely. In general, West European countries redistribute considerably more than, say, the United States and countries in Africa, Asia, Eastern Europe and Latin America.
Individual attitudes towards income redistribution depend on both self-interest, whether one pays more in taxes to finance redistribution than receives in benefits or receives more in benefits than one pays in taxes, and fairness considerations, what one thinks would be a fair level of taxes and benefits if not being oneself affected by those.
To understand the role of fairness considerations in migration decisions, new research by Ilpo Kauppinen and Panu Poutvaara focuses on Denmark, one of the most redistributive countries in the world.
The authors surveyed more than 4,000 Danes living abroad about their attitudes towards income redistribution in Denmark. As Denmark does not tax its citizens living abroad, migrants neither pay for redistribution nor receive transfers. The study then compared migrants’ attitudes with attitudes among Danes living in Denmark.
They find a striking gender difference in emigrants’ opinions. The majority of men who have emigrated from Denmark to non-Nordic countries are against increasing redistribution in Denmark, and the majority of women are in favour, independently of where they live. Men who have emigrated from Denmark to other Nordic countries, which also redistribute incomes extensively, have quite similar attitudes as men living in Denmark.
Figure 1 shows that although men are somewhat more negative towards redistribution than women also among non-migrants, the gender difference is much smaller, and there is no majority in favour or against more redistribution.
Taken together, these findings suggest that men who emigrate from Denmark to countries with lower taxes tend to find redistribution in Denmark too high also from fairness perspective. Women who have emigrated, instead, support more redistribution than women who stay in Denmark. The stark gender difference remains when solely looking at those who emigrated for work reasons.
The study also asked emigrants about their attitudes towards increasing redistribution in their country of residence. The results show that a clear majority of women support more redistribution in their current country of residence. The majority of men support more redistribution in the United States, but more men oppose than support increasing redistribution in non-Nordic Western European countries.
These results suggest that most men who emigrate outside Nordic countries find redistribution in Denmark too high from fairness perspective, but they also find the level prevailing in the United States and most non-Western countries unfairly low. Especially Danes living in the United States are willing to support higher taxes even when having to pay those themselves.
Finally, the researchers analysed how own income level is related to support for redistribution. Intriguingly, support for redistribution in Denmark among emigrants is lower among those with higher own earnings, both when analysing pre-migration earnings in Denmark and current earnings abroad. As migrants neither gain nor lose from redistribution in their country of origin, the findings provide strong evidence that migrants’ fairness considerations are to a certain extent in line with what would be good for people like oneself.
Ilpo Kauppinen, VATT Institute for Economic Research
Email: ilpo.kauppinen@vatt.fi
Panu Poutvaara, LMU Munich and ifo Institute
Email: poutvaara@ifo.de. Phone: + 49 89 9224 1372.
Home page: https://www.ifo.de/en/poutvaara-p
Research-related blog posts in English: https://voxeu.org/article/self-selection-and-sorting-among-refugees-and-irregular-migrants-europe