Don’t stop believin’: Income group heterogeneity in updating of social mobility beliefs

Abstract

This article presents a novel explanation for why demand for redistribution may not respond to information on low intergenerational mobility on average. Conducting a survey experiment in Austria, we show that the average treatment effect on perceptions is mostly driven by high-income individuals while low-income individuals hardly react. Using data from two related survey experiments, we document similar heterogeneity in Germany, the United States, Italy, and Sweden, while France and the United Kingdom appear to exhibit different dynamics. The low-income group, which has the strongest incentive to increase demand for redistribution, makes few adjustments to its beliefs. This may explain the frequently observed persistence of redistributive preferences. We observe that demand for redistribution remains unchanged on average and across income groups in the five countries with differential belief updating by income. Conversely, a more substantial increase in demand for redistribution seems to occur in France, where all income groups update their beliefs similarly. Further, we provide suggestive evidence that low-income individuals update their beliefs more in less ego-relevant contexts, indicating motivated beliefs.