The evolution of affluent support for redistribution in Germany in the context of rising inequalities

Abstract

This paper explores the changing attitudes of the most affluent individuals towards state intervention in redistribution in Germany in the context of growing inequality. Contrary to the predictions from traditional political economy models, a growing body of research suggests that the most affluent individuals could support more redistributive policies in reaction to higher income inequality due to altruism, fear of externalities (such as rising crime rates), and potential economic and social costs associated with downward mobility. Using survey data from the European Social Survey (ESS) from 2002 to 2020, our results provide robust evidence of our main prediction: we find a significant relative increase in support for redistribution among the top 30% of earners (compared to the bottom 70% of earners). Our heterogeneous analysis then reveals that the substantial increase in support for redistribution among the affluent has increased among supporters of the political left. This trend seems, however, to be comparatively less pronounced in East Germany.