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1. The politicized pandemic: Ideological polarization and the behavioral response to COVID-19*

Author:
Gianluca Grimalda, David Pipke, Fabrice Murtin, and Louis Putterman
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
We investigate the relationship between political attitudes and prosociality in a survey of a representative sample of the U.S. population during the first summer of the COVID-19 pandemic. We find that an experimental measure of prosociality correlates positively with adherence to protective behaviors. Liberal political ideology predicts higher levels of protective behavior than conservative ideology, independently of the differences in prosociality across the two groups. Differences between liberals and conservatives are up to 4.4 times smaller in their behavior than in judging the government’s crisis management. This result suggests that U.S. Americans are more polarized on ideological than behavioral grounds.
Topic:
Politics, Ideology, Pandemic, COVID-19, and Protection
Political Geography:
North America and United States of America

2. Does ethnic heterogeneity decrease workers’ effort in the presence of income redistribution? An experimental analysis

Author:
Christoph Schütt, David Pipke, Lena Detlefsen, and Gianluca Grimalda
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Ethnic discrimination is ubiquitous, and it has been shown to exert adverse effects on income redistribution. The reason is that a country’s ethnic majority, if richer than the average, may be unwilling to transfer resources to the country’s ethnic minorities if poorer than the average. A yet untested mechanism is that a country’s ethnic majority may reduce their work effort knowing that their income will finance redistribution to ethnic minorities. We test for this mechanism experimentally in triadic interactions. A German citizen acting as a worker is randomly matched with a recipient who can be another German, an economic migrant, or an asylum seeker in Germany. Workers know that another German citizen may transfer part of their earnings to the recipient. The recipient does not exert any work effort. Even if the recipient’s identity does not affect effort in the aggregate, social identity strongly moderates this relationship. Participants with a strong German identity, i.e., who report feeling close to other Germans, exert significantly less effort than other participants if the recipient is an asylum seeker. They also exert more effort when matched with a German recipient than an asylum seeker, while participants with a less strong German identity do the opposite. Moreover, participants with a strong German identity exert slightly more effort when matched with economic migrants than with asylum seekers, while others tend to do the opposite, albeit statistically insignificantly. Workers’ beliefs over the third party’s redistribution rate do not mediate such results and are generally inaccurate.
Topic:
Economics, Discrimination, Tax Systems, Labor Market, Redistribution, and Welfare State
Political Geography:
Global Focus

3. Cross-Country Evidence on the Determinants of Preferences for Redistribution

Author:
Gianluca Grimalda and David Pipke
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Redistribution differs widely across countries, but our understanding of why this is the case is limited. In democracies, the extent of redistribution should ultimately reflect citizens’ preferences. We measure preferences for redistribution in six developed countries through internationally standardized questions in which respondents are faced with realistic budgetary constraints on their choice. We also measure a broad array of demographic, attitudinal, and ideological characteristics and examine their correlations with the preferred pattern of redistribution. As expected, individual income is associated with lower demand for redistribution, but this relationship loses significance once other factors are controlled for. Beliefs on social mobility have, in the aggregate, the largest effect in reducing demand for redistribution, the effect being largest in the US but insignificant in Italy and Slovenia. Trust in government has a negative effect on demand for redistribution across all countries. In line with other studies, we interpret this result as evidence that people believing that the political élite is corrupt demand more redistribution. Financial security, a proxy for the Prospect of Upward Mobility hypothesis, is also a significant correlate of preferences for redistribution, the effect being largest in Japan but small in the UK and Slovenia. Finally, discrimination of racial minorities is associated with lower demand for redistribution, but the effect is only significant in the US and Germany. Overall, the main theories that have been proposed to account for preferences for redistribution are confirmed to be valid, but with significant variation across countries.
Topic:
Minorities, Democracy, Economic Mobility, Social Order, and Redistribution
Political Geography:
Global Focus

4. Kind or contented? An investigation of the gift exchange hypothesis in a natural field experiment in Colombia

Author:
Francesco Bogliacino, Gianluca Grimalda, and David Pipke
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
The gift exchange hypothesis postulates that workers reciprocate above market-clearing wages with above-minimum effort. This hypothesis has received mixed support in dyadic employer-worker relationships. We present a field-experimental test to assess this hypothesis in the context of a triadic relationship in which only one out of two workers receives a pay increase. We conjecture that inequality aversion motivations may thwart positive reciprocity motivations and analyze the interaction between such motivations theoretically. Across three treatments, the pay increase is justified to workers based on either relative merit or relative need or was arbitrary as no justification was offered. Two conditions in which either none or both workers receive a bonus serve as the reference. In contrast to the gift exchange hypothesis, we find that pay increases lead to a decrease in productivity. Such a decrease is most sizable in the condition where both workers receive the bonus. A post-diction of this result is that workers interpret the monetary bonus as a signal of the employer’s contentment with their effort, which makes them feel entitled to reduce their effort. In other treatments, receiving the pay increase while the coworker does not has a positive effect on productivity, especially when the pay increase is based on merit. This result is consistent with statusseeking preferences rather than aversion against advantageous inequality. Conversely, not receiving the pay increase while the coworker does, leads to lower productivity, especially when the pay increase is assigned based on relative needs.
Topic:
Labor Issues, Employment, Labor Policies, and Wealth
Political Geography:
Colombia and South America