Join us for an ICES Brown Bag Lecture, featuring Johanna Mollerstrom.
Prof. Mollerstrom, of Humboldt University, will discuss her paper (co-authored with Manja Gärtner and David Seim) Individual Risk Preferences and the Demand for Redistribution (Abstract). The talk will take place on Tuesday, March 21st, from 12:00 to 1:00pm, in room 5075 of the Metropolitan Building, Arlington campus.
Coffee and dessert will be provided.
Please visit the Brown Bag Schedule to learn more about the Brown Bag series.
Redistributive policies can provide an insurance against future negative economic shocks. This, in turn, implies that an individual’s demand for redistribution is expected to increase with her risk aversion. To test this prediction, we elicit risk aversion and demand for redistribution through a well-established set of measures in a representative sample of the Swedish population. We document a significant and robust positive relation between risk aversion and the demand for redistribution that is also economically significant. We show that previously used proxies for risk aversion (such as being an entrepreneur, or having a history of unemployment) do not actually capture the effect of risk aversion but have distinctly different effects on the demand for redistribution. We also show evidence indicating that risk aversion can explain significant parts of the well-studied relations between age and gender on the one hand and demand for redistribution on the other.