Income Mobility, Luck vs Effort Beliefs, and the Demand for Redistribution – Reality, Perceptions, and Dynamics

It is well documented that beliefs about income mobility affect preferences for redistribution. We use a unique Swedish data set, which matches survey data to administrative data at the individual level, to jointly investigate perceived and real income mobility and their respective link to redistributive preferences. We ask to what extent perceptions of own income mobility match the actual mobility that has taken place, and whether it is a person’s perceived or real income mobility that is most predictive of her demand for redistribution, and of her beliefs about the relative role that luck and effort play in determining individual economic success. Further, our data allows us to better understand the intergenerational and intrapersonal dynamics of the latter beliefs. For example, do parents aim to strategically teach their children that effort matters more than luck? What is the causal impact of a positive mobility shock to luck/effort beliefs?