An Egalitarian system breeds generosity: The impact of redistribution procedures on pro-social behavior

• Main Authors: Riyanto, Yohanes Eko, Zhang, Jianlin
• Other Authors: School of Humanities and Social Sciences
• Format: Article
• Language: English
• Published: 2014
• Subjects: DRNTU::Social sciences::Sociology
• Online Access: https://hdl.handle.net/10356/101562; http://hdl.handle.net/10220/19721
• Institution: Nanyang Technological University

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)