These preference differences help explain why some earn more than others

An interesting paper, De Gustibus non est Taxandum: Theory and Evidence on Preference Heterogeneity and Redistribution by Benjamin Lockwood and Matthew Weinzierl.

Individuals differ in the value they place on consumption relative to leisure. These preference differences help explain why some earn more than others, and they are a central part of popular and scholarly debates over taxation. In this paper, we show that variation in these preferences may also help explain why the extent of redistribution varies across countries and U.S. states, and why (at least in the case of the United States) redistribution is weaker than conventional theory would suggest.

Translation: people that value money over other lifestyle choices such as leisure, tend to earn more. When put baldly, it doesn't seem that big a deal but it becomes so when you consider the implications. One implication being that people who are poorer are likely to be poorer because they have differently valued their choices, putting greater weight on such things as leisure and less on saving and work. When put that way, it becomes fairly explosive.

It is, however, consistent with some of the IRS, BLS and census figures. I am calling these numbers from memory so they will not be accurate but the proportions will be close. My recollection is that the cummulative hours worked per year in a bottom quintile home was something on the order of 800 hours whereas in the top quintile, it was something like 3,500 hours. So even if they made exactly the same per hour, ceteris paribus, you would expect top quintile homes to earn 4.5 times as much as bottom quintile homes simply as a function of work preference/capability.

There is a second translation and implication as well. Countries where there is greater heterogeniety of the extent to which work is valued demonstrate a reduced commitment to redistibution of income. This makes logical sense but is still stark. If you don't think your neighbor is as committed to working hard as you are, you are less inclined to be generous when it comes to income transfers.

So greater cultural variety leads to bigger difference in work preference leads to less generosity in transfer payments leads to less security leads to greater income inequality. It seems to imply a tradeoff between greater homogenity (around value of work) with greater tolerance for income transfers/equalization VERSUS greater tolerance for cultural variety but lower income support.