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The Impact of Diversity on Perceptions of Income Distribution and Preferences for Redistribution
1UCLA, Bunche Hall 8283, 315 Portola Plaza, Los Angeles, CA 90095.
Abstract:
Does socioeconomic diversity affect people's perceptions of the income distribution and their preferences for redistribution? I exploit a financial aid reform that drastically raised the share of low-income students at an elite university in Colombia and leverage variation in exposure to low-income peers across cohorts and majors using difference-in-differences. Using original survey data and administrative records, I study how exposure to low-income peers affects high-income students' social networks, perceptions, and preferences. The policy caused high-income students to interact more with low-income students, giving them more accurate perceptions of the income distribution and boosting their support for progressive redistribution.
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