Inequalities and their impacts in European societies. An account of the research project after two years. Mid-Term Conference, Budapest, Friday–Saturday 2012 March 23–24. Political and cultural impacts of growing inequalities Workpackage 5 research report Workpackage coordinators: Herman Van de Werfhorst and István György Tóth Contributors to this report: Brian Burgoon Christina Haas Dániel Horn Márton Medgyesi Natascha Notten István György Tóth Herman Van de Werfhorst Version March 13, 2012 Discussant: Jonas Pontusson (Université de Genéve)

Workpackage summary info: - 17 papers - Data from: ESS, EVS, WVS, Eurobarometer, ISSP, EU-SILC, IALS, EES, CMP, EQLS, - Modelling techniques: 2 or 3 level random intercept models, time series and cohort analyses, OLS with fixed effects

Inequality - actual and perceived - measured by hhold income - type: distance, variance, polarization Political and cultural aspects of society (1) perceptions of inequality, (2) civic, cultural and political participation, (3) preferences for redistribution, (4) the consequences for the political system, (5) the legitimacy of politics Causality? (Which direction? What type?) Key variable:Studied (related) variables:Relationship The structure of the problem studied in the workpackage

Table of contents of the report 1.Introduction 2. Inequality and its impacts: theoretical overview, hypotheses 3. Methodological remarks 4. Reflections on/perceptions of changing inequality 5. How inequality affects participation? 6. Changing Inequality and redistribution 7. Rising inequality and consequences for the political system 8. The relation between inequality and legitimacy 9. Conclusions: Does inequality affect politics and culture and if yes, how ?

Findings on effects of inequality on citizens General conclusions: Two major arguments contrasted (in WP5 report): neo-material arguments (resources availability  behavior and perceptions) psycho-sociological arguments (differential resources  anxiety, stress, psychological reconciliation mechanisms  participation, involvement, etc) Both mechanisms are found to be supported Specific conclusions: larger inequality tends to show: - a larger level of accepted inequality (Yaish and Andersen) - no significant cross section effect on dissatisfaction with the level of perceived inequality but perception responds to change in inequality (Medgyesi) - somewhat negative and slightly significant correlation with various forms of – political, civic, social and cultural – participation (Horn) - positive association with preferences for redistribution (Tóth and Keller)

General conclusions - testing the link between inequality and preferences for redistribution yield results here in favour of the basic political economy model, suggesting that inequality positively associates with preferences for redistribution - the broken link between inequality and redistribution is attributable to how preferences for redistribution are transformed into redistribution itself. Specific conclusions: - there is a negative association between inequality and the salience of redistribution issues in left-right selfplacement. Points to reversed causality: low salience of redistribution in the political sphere leads to more dispersed income distributions. (van der Meer and Hakhverdian) - inequality affects value systems which can be assumed to affect political preferences and positioning in the long-run (Corneo) - inequality is related to anti-globalization backlash in party positioning (Burgoon). Findings on effects of inequality on political forces

Findings on effects of inequality on legitimacy General findings: Inequality is significantly associated to lower levels of legitimacy of politics. Specific findings: -higher levels of inequality associate with lower levels of political legitimacy; experiencing less inequality is associated with more support for democracy (Andersen) -legitimacy is related to educational inequality; there is a clear and increasing educational gap in euroscepticism over a period of thirty years (Hakhverdian) -income inequality is related to life satisfaction and to support of governmental interventions and funding. Higher levels of inequality associates with less satisfaction and with less political legitimacy (Zagórski and Piotrowska)

Interpretation: causality Three types of causality (after Goldthorpe 2001): (1)causation as robust dependence (2)causation as consequential manipulation (3)causation as a generative process. General findings: -the findings of the GINI-project do not allow for a causal analysis following the ‘consequential manipulation’ paradigm. -the theoretically-grounded analysis of a possible association between inequality and outcomes does provide leverage to suggest causation as a generative process. SPECIFIC HYPOTHESES have therefore been generated which are more informative than seen in much of the existing literature.

Broad theoretical framework The Wilkinson Hypothesis: inequality is harmful not only because of the resources that are more unequally distributed, but also because of interpersonal processes, such as enlarged status differences. The Neo-Material (or resources) theory holds that it is just the resources (at the individual and contextual level).

What do we find? Resources (extensively measured) are not fully able to explain inequality effects on social, civic and cultural participation. If education becomes less exclusionary, the ‘status dimension’ of education loses ground (concerning cultural participation). A generalization of the Wilkinson Hypothesis is: If distributions in stratifying variables (e.g. education, income) become more equal, the status element of these variables diminishes.

Notten, Lancee and Van de Werfhorst

Interpretation: an apparent contradiction in the findings and lessons for further research 1: citizens living in high inequality countries are usually more accepting higher levels of inequality than individuals living in less unequal societies. (Yaish and Andersen) 2: individuals living in more unequal societies are in favour of more redistribution (Tóth and Keller) and government intervention (Zagorski and Piotrowska), and have a more negative attitude to inequality (Medgyesi). 3: salience of traditional (i.e. economic) left-right issues is higher in more egalitarian societies (Hakhverdian and Van der Meer). Inequality levels seem to be the consequence rather than the cause of low salience of economic redistribution. To be studied further: how political systems translate between inequality, demand for redistribution and actual levels fo redistribution

InequalityTolerance to Inequality + Inequality + Preference for redistribution ? Salience of economic redistribution - Inequality Even if redistribution is desired, a low salience of redistribution translates into low political willpower to combat inequality.

Thank you for your attention

Figure 1. Cross-country and inter-temporal relationship between income inequality and attitudes to inequality (pooled WVS/EVS data) Source: Medgyesi (2011)

Figure 2.– Effect of income on social participation for observed values of MDMI above and below the median income Source: Lancee and van de Werfhorst (2011: 31)

Figure 3. – Association of inequality with turnout Note: predicted probabilities are for a 40 year old man with average income, who finished education at age 18 Source: Horn (2011a: 22)

Figure 4. – Inequality and redistributive preference index (RPI) in European countries Source: Tóth and Keller (2011: 30)

Figure 7.1. Marginal effect of redistribution on left-right self-placement. Source: Hakhverdian and Van der Meer presentation slides

Figure 7.2: Anti-globalization positions and Income inequality (national means, ). Source: Burgoon (2011: 22) Figure 7.3: How Social Security transfers reduce the effect of gross inequality on anti-globalization. Source: Burgoon (2011: 31)

Figure 8.1a and 8.1b. Public Opinion on Democracy by (a) level of economic development and (b) income inequality. Note: Trend lines are lowess smooths fitted to the data with outliers (Switzerland CH and Russia RU) omitted. Source: Andersen, 2011.

Figures 8.2a and 8.2b. The interaction between individual-level income and income inequality Note: Effect display showing the interaction between individual-level income and income inequality (measured by the Gini coefficient) in their effects on support for democracy. Dotted lines represent 95% confidence bands. Source: Andersen, 2011