Contributions in Merlin

In this Kühne Impact Series, we focus on the distributional effects of climate action. We simulate the distributional effects of a global carbon tax – the optimal economic policy tool in the fight against climate change – with or without international redistribution schemes. Our main result is that the economic costs of climate action are disproportionately borne by poor countries, but that realistic cross-country transfers could remedy this inequality. For example, annual North-South transfers of an average $200 per person would suffice to equalize the economic costs of climate action.

Actual and perceived gender norms are key to understanding gender inequality in society. In this paper, using newly collected nationally representative datasets from 60 countries that cover over 80% of the world population, we study gender norms on two distinct policy issues: 1) basic rights, allowing women to work outside of the home, and 2) affirmative action, prioritizing women when hiring for leadership positions. We establish that misperceptions of gender norms are pervasive across the world. The nature of the misperception, however, is context-dependent. In less gender-equal countries, people underestimate support for both policies, particularly among men; in more gender-equal countries, people overestimate support for affirmative action, particularly among women, and underestimate support for basic rights. We provide evidence of gender stereotyping and overweighting of the minority view as potential drivers of the global patterns of misperceptions. Together, our findings indicate how misperceptions of gender norms may obstruct progress toward gender equality, but also may contribute to sustaining gender policies that are not necessarily favored by women themselves.

The empirical evidence on the existence of social preferences—or lack thereof—is predominantly based on student samples. Yet, knowledge about whether these findings can be extended to the general population is still scarce. In this paper, we compare the distribution of social preferences in a student and in a representative general population sample. Using descriptive analysis and a rigorous clustering approach, we show that the distribution of the general population’s social preferences fundamentally differs from the students’ distribution. In the general population, three types emerge: an inequality averse, an altruistic, and a selfish type. In contrast, only the altruistic and the selfish types emerge in the student population. We show that differences in age and education are likely to explain these results. Younger and more educated individuals—which typically characterize students—not only tend to have lower degrees of other-regardingness but this reduction in other-regardingness radically reduces the share of inequality aversion among students. Differences in income, however, do not seem to affect social preferences. We corroborate our findings by examining nine further data sets that lead to a similar conclusion: students are far less inequality averse than the general population. These findings are important in view of the fact that almost all applications of social preference ideas involve the general population.

Parsimony is a desirable feature of economic models but almost all human behaviors are characterized by vast individual variation that appears to defy parsimony. How much parsimony do we need to give up to capture the fundamental aspects of a population’s distributional preferences and to maintain high predictive ability? Using a Bayesian nonparametric clustering method that makes the trade-off between parsimony and descriptive accuracy explicit, we show that three preference types—an inequality averse, an altruistic and a predominantly selfish type—capture the essence of behavioral heterogeneity. These types independently emerge in four different data sets and are strikingly stable over time. They predict out-of-sample behavior equally well as a model that permits all individuals to differ and substantially better than a representative agent model and a state-of-the-art machine learning algorithm. Thus, a parsimonious model with three stable types captures key characteristics of distributional preferences and has excellent predictive power.

Using cross-sectional data from 93 countries, we investigate the relationship between the desired level of redistribution among citizens from different socioeconomic backgrounds and the actual extent of government redistribution. Our focus on redistribution arises from the inherent class conflicts it engenders in policy choices, allowing us to examine whose preferences are reflected in policy formulation. Contrary to prevailing assumptions regarding political influence, we find that the preferences of the lower socioeconomic group, rather than those of the median or upper strata, are most predictive of realized redistribution. This finding contradicts the expectations of both leading experts and regular citizens.

The growth of the knowledge economy alters the risks and opportunities citizens experience in the labor market. Governments attempt to steer and support the adaptation of the workforce, enhance and spread opportunities, and mitigate the negative implications of these changes, in particular via skill-developing labor market policies. However, many recent studies document a puzzling discrepancy between the needs of knowledge economy losers in terms of skill development and their policy preferences. In particular, those most threatened by the knowledge economy prioritize compensation and protection over investments in human capital. Our study theorizes and studies four mechanisms – two ego-tropic, one socio-tropic and one group-tropic – to explain this preference pattern: they a) may have distorted perceptions of the distributive effects of policy reforms, b) may assign less importance to human capital investment as opposed to transfers and protection, c) may think that investment reforms do not contribute to societal equality, or d) may feel that the reforms do not deliver social recognition for themselves and their social ingroups. To test the relative importance of these mechanisms, we analyze novel data from an original survey in nine European countries, using both observational and experimental evidence. Our findings provide evidence for the group-specific recognition mechanism. Knowledge economy losers do think that they would benefit from social investment, and they also think that investment would deliver on equality, but they do not perceive a distinctive benefit for themselves or their ingroups. In their eyes, compensation reforms are the only type of reforms that benefit their ingroups exclusively. Our findings suggest that the effectiveness of policy responses to the knowledge economy depends not only on material effects of reforms but is conditional on cultural and recognition-based mechanisms.

Tracking, the policy of separating pupils into groups based on aptitude, is common, controversial and imperfectly understood. Little consensus exists on the circumstances under which tracking is practiced and what effects it may have on pupils. In this paper, I develop a novel method of measuring within-school tracking using observational data and estimate its long-run effects across a broad set of pupil outcomes. I show that tracking is prevalent, and that it varies both across schools and within schools over time. I find only limited evidence for tracking having significant short or long-run effects on pupils, although girls and boys seem to be affected differently. Finally, I provide evidence against the notion that tracking is a driver of inequality.

Many recent studies have underlined the importance of inequality perceptions as determinants of political demands and behavior. Yet, this literature often focuses on the public perception of one single, often economic, dimension of inequality. This study aims to broaden our perspective and provides a comprehensive assessment of public perceptions of socioeconomic (income, education, and class inequality) and sociocultural inequalities (gender, sexual orientation, and migration background inequality). Furthermore, we disentangle different components of inequality perceptions: the assessed importance of differences, as how problematic they are judged, and who thinks that these inequalities are central to political debates nowadays. We find that highly educated respondents attribute more importance and mostly judge inequalities across the board as more important than the less educated. While information on the extent of inequality can move the assessment of how important inequality is in society, the judgment of these divides remains unchanged, hinting to more deep-seated beliefs that are not as easily changed.

In this chapter, we conceptualise an ideal framework that captures three reinforcing levers for measuring local government performance in sub-Saharan Africa, specifically Ghana, namely policy pronouncement, political processes and internal operations, and policy implementation. Given data limitations we employ a ‘next best’ approach to apply this framework and measure local government performance by combining a weighted ‘quality of reporting’ measure with selected available measures on political processes and internal operations, and policy implementation, so as to construct a composite index for local government performance (LGI). We also look at the relationship between our performance indices and other indices of local government performance in Ghana, as well as poverty headcounts. We find that, on average, urban districts perform better than their rural counterparts and also districts located in the southern half of Ghana perform better. Our constructed composite index is positively correlated with indices from Ghana’s district league tables. It has a negative relationship with poverty headcount in districts, indicating that districts with lower poverty incidence are more effective and responsive to their citizens. The findings provide a snapshot of institutional performance across Ghana’s districts, and offer a more comprehensive basis for considering variations in subnational institutional performance, including the effects of decentralisation than previous studies of Ghana – or indeed African countries more broadly.

Opposition between the far right and the new left has transformed West European politics, mainly through increasing sociocultural conflicts. We ask what the new cleavage articulated by these parties implies for the politicization of inequalities in advanced knowledge societies. We contrast two diverging expectations in existing literature: A first, more rational-choice-based perspective expects a trade-off, with new left voters "privileged" by economic transformations emphasizing sociocultural inequalities over socioeconomic ones–and vice versa for "disadvantaged" far right voters. A second, more sociological perspective, predicts attitudes on inequalities to be aligned along a single dimension from new left "universalists" being inequality-averse to right-wing "particularists" being more inequality-tolerant. Our evidence based on original survey data from Germany supports the second perspective. Studying the structural (educational, class, etc.) foundations of inequality aversion suggests that even the transformed (new) left electorate is more sensitive to all dimensions of inequality than voters on the (far) right.