Unequal opportunities due to factors determined at birth often lead to widely differing economic outcomes, but these factors are frequently sidelined in political economy models of inequality. These models emphasize income-maximization as a determinant of redistributive preferences, focusing either on a person's current or expected income. In doing so, these approaches are highly individualistic paying little attention to social dynamics. In this paper, I argue that individuals' income expectations are affected by circumstances beyond individual control; in particular, characteristics determined at birth--such as ethnicity, gender, or family background--have a lasting impact on income expectations. As such, individuals face different levels of economic advantage or disadvantage, which they in turn factor into considerations of income-maximization. Employing a rational choice model, I show that this implies that individuals demand less redistribution the higher their economic advantage is, even if they are currently poor. An analysis of economic and social survey data suggests that this argument holds across a wide range of Western democracies, including the US and most European countries. I also provide evidence that people accurately perceive their own economic advantage or disadvantage, but do not regard it as a violation of norms of fairness, such as equality of opportunity. Overall, the paper shows how social dynamics generate inequality and how redistributive preferences evolve from the same process in a way that serves to sustain it. The paper contributes to the literature by theorizing and operationalizing a novel approach to income expectations and preference formation, while bringing it closer to sociological approaches to inequality that focus on social and group dynamics.
