Template-Type: ReDIF-Paper 1.0
Author-Name: Alberto Montagnoli
Author-Name-First: Alberto
Author-Name-Last: Montagnoli
Author-Email: a.montagnoli@sheffield.ac.uk
Author-Workplace-Name: University of Sheffield
Author-Name: Mirko Moro
Author-Name-First: Mirko
Author-Name-Last: Moro
Author-Email: mirko.moro@stir.ac.uk
Author-Workplace-Name: University of Stirling
Author-Name: Robert Wright
Author-Name-First: Robert
Author-Name-Last: Wright
Author-Email: r,e,wright@strath.ac.uk
Author-Workplace-Name: University of Strathclyde
Title: Financial literacy and attitudes to redistribution
Abstract: This study proposes a conceptual framework on how financial literacy could play a key role in shaping individuals’ preference for government’s redistribution policies. Using novel data from the British Election Survey in 2014, we employ two distinct ordinal measures of attitudes to redistribution, capturing individual stated preferences on whether the government should redistribute incomes and whether the government should intervene in making incomes more equal. We find a significant negative relationship between financial literacy and attitudes in favour of government intervention for income redistribution. The effects are economically important, robust to several specifications, samples, in instrumental variable regressions and independent of generic attitudes towards other types of inequality/discrimination, e.g. towards females or homosexuals. An inquiry into the mechanisms of this significant negative relationship suggests that public value and social rivalry effects dominate homo-oeconomicus considerations in mediating the effect of financial literacy on attitudes to redistribution. 
Length: 43 pages
Creation-Date: 2016-03
Revision-Date: 
Publication-Status: Published
File-URL: http://www.strath.ac.uk/media/1newwebsite/departmentsubject/economics/research/researchdiscussionpapers/16-05.pdf
File-Format: Application/pdf
Number: 1605
Classification-JEL: D14, D31, D53, D63, H23, I22, I24
Keywords: Financial literacy, redistribution, in equality, attitudes, Great Britain
Handle: RePEc:str:wpaper:1605