Trickle-Down Economics, Merit, and Redistribution: An Experiment with the Poorest and Richest US Americans

Abstract

Despite growing income inequality, demand for redistribution has remained stagnant, which is puzzling for the poor. We investigate whether attitudes toward “trickle-down” economics and fairness affect redistribution demand. We involve US residents from the bottom and top 20% of the income distribution (N = 2, 346) in experimental redistributive decisions from high-income real-life entrepreneurs to low-income recipients. We find that entrepreneurs’ activities possibly generating trickle-down effects, such as employing 1,000 workers, are irrelevant to redistribution. Conversely, the desire to sanction the “undeserving poor” and, less importantly, to reward the “deserving rich” significantly affect redistribution. High-income and low-income participants’ decisions follow surprisingly similar patterns