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One Dollar, One Vote

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  • Loukas Karabarbounis

Abstract

This paper revisits the relationship between inequality and redistribution in a panel of advanced OECD countries. Using panel data methods that hold constant a variety of determinants of redistributive spending, I find a non-monotonic relationship between pre-tax-and transfer distribution of income and redistribution. Relative to mean income, a more affluent rich and middle class are associated with less redistribution and a richer poor class is associated with more redistribution. These results are consistent with a one dollar, one vote politico-economic equilibrium: When the income of a group of citizens increases, aggregate redistributive policies tilt towards this group’s most preferred policies.

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Bibliographic Info

Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 121 (2011)
Issue (Month): 553 (06)
Pages: 621-651

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Handle: RePEc:ecj:econjl:v:121:y:2011:i:553:p:621-651

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References

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Citations

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Cited by:
  1. Adam, Antonis & Kammas, Pantelis & Lapatinas, Athanasios, 2013. "Income inequality and the tax structure: Evidence from developed and developing countries," MPRA Paper 46148, University Library of Munich, Germany.
  2. Pfarr, Christian, 2012. "Meltzer-Richard and social mobility hypothesis: revisiting the income-redistribution nexus using German choice data," MPRA Paper 43325, University Library of Munich, Germany.
  3. Alberto F. Alesina & Paola Giuliano, 2009. "Preferences for Redistribution," NBER Working Papers 14825, National Bureau of Economic Research, Inc.
  4. Herwig Immervoll & Linda Richardson, 2011. "Redistribution Policy and Inequality Reduction in OECD Countries: What Has Changed in Two Decades?," OECD Social, Employment and Migration Working Papers 122, OECD Publishing.
  5. Großer, Jens & Reuben, Ernesto, 2013. "Redistribution and market efficiency: An experimental study," Journal of Public Economics, Elsevier, vol. 101(C), pages 39-52.
  6. Javier Olivera, 2012. "Preferences for Redistribution in Europe," Working Papers 201225, Geary Institute, University College Dublin.
  7. Ichino, Andrea & Karabarbounis, Loukas & Moretti, Enrico, 2010. "The Political Economy of Intergenerational Income Mobility," IZA Discussion Papers 4767, Institute for the Study of Labor (IZA).
  8. Lee J. Alston & Marcus Melo & Bernardo Mueller & Carlos Pereira, 2012. "Changing Social Contracts: Beliefs and Dissipative Inclusion in Brazil," NBER Working Papers 18588, National Bureau of Economic Research, Inc.
  9. Pfarr, Christian & Ulrich, Volker, 2011. "Discrete-Choice-Experimente zur Ermittlung der Präferenzen für Umverteilung
    [Discrete-Choice-Experiments to elicit individuals' preferences for redistribution]
    ," MPRA Paper 31707, University Library of Munich, Germany.
  10. Alberto Alesina & Guido Cozzi & Noemi Mantovan, 2009. "The Evolution of Ideology, Fairness and Redistribution," Working Papers 2009_05, Durham University Business School.
  11. Ronald Bachmann & Peggy Bechara & Sandra Schaffner, 2012. "Wage Inequality and Wage Mobility in Europe," Ruhr Economic Papers 0386, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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