An Egalitarian system breeds generosity: The impact of redistribution procedures on pro-social behavior
Riyanto, Yohanes Eko
Date of Issue2014
School of Humanities and Social Sciences
In a meritocratic system, people are compensated on the basis of their individual ability, whereas in an egalitarian system people are equally compensated. Essentially, in the latter system high performers are taxed and subsidize underperformers. Would differences in income redistribution procedures affect people's pro-social behavior? In experiments, we found that people are more generous toward strangers in an egalitarian treatment than in a meritocratic treatment. Interestingly, being taxed does not reduce the generosity of high performers, whereas being subsidized significantly increases the generosity of low performers. (JEL C91, D63, D64)
© 2014 Western Economic Association International.