New chapter: Fair and Unfair Income Inequality
FAIR researchers Alexander W. Cappelen, Ranveig Falch, and Bertil Tungodden have written a chapter titled “Fair and Unfair Income Inequality” for the Handbook of Labor, Human Resources and Population Economics (2020).
A review of the experimental research
Inequality is one of the most pressing issues in the modern world and inequality considerations figure prominently in almost all spheres of society, including at the workplace, in policy debates on taxation, health, social insurance, and market regulations, and in households.
The chapter titled “Fair and Unfair Income Inequality” provides a review of the experimental research on fairness and income inequality. The chapter describes how people differ in the weight they attach to fairness and in what they perceive to be fair and unfair inequalities. Moreover, the chapter illustrates how the pluralism in fairness preferences is essential for understanding a larger number of economic phenomena, including incentives structures in the labor market, bargaining, and redistribution.
Finally, the authors provide an overview of the experimental research on the origins of fairness preferences, focusing on studies of how fairness preferences develop in childhood and adolescence and on how fairness preferences are shaped by the social environment.