This thesis examines the relationship between income, inequality and the welfare state. Majority voting models explaining how income inequality affects the size of the welfare state suffer from mixed empirical evidence. It is shown, that the positive correlation between voter turnout in elections and socio-economic status is not the driving factor of this drawback. This thesis shows that it comes more from the fact that individuals hold biased perceptions of income inequality and social mobility. In addition, this thesis takes a look at the bottom end of the income distribution, and shows that (some) personality traits and unemployment are related.