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Dynamic Political Economy of Redistribution Policy: The Role of Education Costs

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Author Info
Ryo Arawatari () (Graduate School of Economics, Osaka University)
Tetsuo Ono () (Graduate School of Economics, Osaka University)

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Abstract

This paper focuses on how education costs affect the political determination of redistribution policy via individual decision-making on education. For cases of high costs, there are multiple equilibria: the high-tax equilibrium featured by the minority of highly educated individuals and a large size of the government, and the low-tax equilibrium featured by the majority of highly educated individuals and a small size of the government. For cases of low costs, there is a unique equilibrium featured by the majority of highly educated individuals and a large size of the government.

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File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/0731R.pdf
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Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 07-31-Rev.

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Length: 33 pages
Date of creation: Aug 2007
Date of revision: Nov 2007
Handle: RePEc:osk:wpaper:0731r

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Web page: http://www.econ.osaka-u.ac.jp/
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Related research
Keywords: Markov perfect equilibrium Dynamic political economy Redistribution policy Education costs

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Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Hassler, John & Storesletten, Kjetil & Zilibotti, Fabrizio, 2007. "Democratic public good provision," Journal of Economic Theory, Elsevier, vol. 133(1), pages 127-151, March. [Downloadable!] (restricted)
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  2. John Hassler & José V. Rodríguez Mora & Kjetil Storesletten & Fabrizio Zilibotti, 2001. "The Survival of the Welfare State," Economics Working Papers 603, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
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  3. Björklund, Anders & Eriksson, Tor & Jäntti, Markus & Raaum, Oddbjörn & Österbacka, Eva, 2000. "Brother Correlations in Earnings in Denmark, Finland, Norway and Sweden Compared to the United States," IZA Discussion Papers 158, Institute for the Study of Labor (IZA). [Downloadable!]
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  4. Ryo Arawatari & Tetsuo Ono, 2007. "Dynamic Political Economy of Redistribution Policy: The Role of Education Costs," Discussion Papers in Economics and Business 07-31-Rev, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP), revised Nov 2007. [Downloadable!]
    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Tetsuo Ono & Ryo Arawatari, 2008. "Dynamic political economy of redistribution policy: the role of education costs," Economics Bulletin, Economics Bulletin, vol. 4(13), pages 1-13. [Downloadable!]
    Other versions:
  2. Ryo Arawatari & Tetsuo Ono, 2008. "A Second Chance at Success: A Political Economy Perspective," Discussion Papers in Economics and Business 08-04-Rev, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP), revised Jul 2008. [Downloadable!]
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