Manor Road, Seminar room E
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Why has rising income inequality not been accompanied by more redistribution, as predicted by the median-voter hypothesis? Testing this hypothesis in longitudinal perspective requires information on individual income growth over time, which is absent in most of the literature. Addressing this gap, my argument builds on the crucial distinction between absolute and relative income growth, which leads to contrasting theoretical expectations. An individual’s experience of stagnating real incomes over time (absolute income growth) is not a sufficient condition for rising support for redistribution, since it disregards the relative distribution of income growth. Support is only expected to increase among those individuals that have been stagnating more than other groups (relative income growth). The empirical analysis combines group-level estimates of real income growth with individual-level survey data on redistribution and welfare state policy preferences in 20 OECD countries between 1985 and 2016. The results show that both absolute and relative income growth are important predictors of citizens’ demand for redistribution. While relative income growth matters in line with the median-voter hypothesis, the experience of low absolute income growth per se does not make individuals more supportive of redistribution and welfare state policies. The finding that adverse income trajectories do not automatically translate into higher aggregate political demand for more redistribution challenges influential strands of the comparative political economy literature.