Preliminary and Incomplete : Please do not circulate . Redistributive Politics with Target-specific Beliefs

It is widely accepted that beliefs about causes of income play an important role in redistributive politics. These beliefs are often conceptualized as priors about economy-wide parameters, such that a perceived cause of income applies to all income levels. However, we find that roughly 40% of Americans hold different beliefs about causes of high and low incomes. We refer to these beliefs as target-specific beliefs. This suggests a major gap in the literature: assuming that target-specific beliefs related to one group apply automatically to another group may generate comparative statics predictions related to various social changes that get even the sign wrong. This paper is a first step toward addressing this gap. We present a model with three income classes that allows causes of income to differ. Income depends on ability, effort and luck, and beliefs about mobility between the middle class and a low-income class may differ from beliefs about mobility between the middle class and a high-income class. We then analyze the effects of target-specific beliefs and major social changes, including skill-biased technological change and the shrinking middle class, on redistributive politics. Finally, using unique social survey and experimental data, we find that target-specific beliefs play an important role in redistributive preferences and behavior in a laboratory experiment. D63; D72; H21; H24