Income Growth, Redistributive Preferences and Voting: The Offsetting Impact of Absolute and Relative Economic Changes

Economic circumstances are correlated with demand for redistribution, but their explanatory for recent electoral shifts seems to have decreased over time. Because parties compete on both redistributive and non-redistributive issues, it is important to accurately conceptualise which dimensions of changes in economic circumstances voters emphasise in their formation of policy preferences and party choice. Specifically, I argue that a novel distinction between “absolute” and “relative” economic experiences (i.e. absolute growth levels versus the relative distribution of growth) can shed light on both the formation of preferences for redistribution as well as vote choice between different parties. I hypothesise that absolute and relative economic experiences have offsetting effects on redistribution preferences as well as voting for parties offering more or less redistributive platforms. This is because the theoretical underpinnings of absolute and relative experiences differ: An unequal relative distribution of economic (mis)fortunes triggers distributive conflict in line with political economy theories. In contrast, absolute economic changes refer to shared experiences, and in line with public opinion theories, stagnating absolute economic fortunes downplay narrow self-interest, reduce social affinity, reduce support for redistribution, and might increase voting for radical right parties. The empirical analysis employs new estimates for absolute and relative real income growth at the bottom, middle and top of the distribution using Luxembourg Income Study and the OECD Income Distribution Database. These indicators are combined with 13 waves of ISSP surveys and 9 waves of ESS surveys, which contain information on redistribution preferences as well as support for radical left, radical right and mainstream parties. The sample encompasses 20 established democracies between 1985 and 2019. The analysis first shows that absolute and relative economic experiences have opposite effects on voters’ redistributive preferences. It then moves on to explore the direct effects of absolute and relative income growth on vote choice, and their indirect effects via redistributive preferences, using multinomial logit models. The paper sheds light on the electoral consequences of rising income inequality over a much longer time span than previous studies, highlighting offsetting mechanisms between absolute and relative economic experiences. Although they are partly cancelling each other out, both absolute and relative dimensions of economic well-being are highly relevant for the electoral support of parties that offer both redistributive and non-redistributive platforms.