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Prospects of upward mobility and preferences for redistribution: Evidence from the Life in Transition Survey

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  • Cojocaru, Alexandru

Abstract

This paper investigates empirically the link between the prospects of upward mobility and preferences for redistribution using data for a large number of countries from the Life in Transition Survey. The survey is unique in that it provides a detailed account of expected future mobility, and makes it possible to differentiate respondents by their degree of risk aversion — both key pillars of the POUM model. The results from the pooled sample, and those for the EU member states confirm the theoretical predictions of Benabou and Ok (2001) — individuals' expectations of upward mobility reduce their preference for redistribution, but only when the degree of risk aversion is low. The POUM hypothesis is not borne out by the data in the non-EU countries.

Suggested Citation

  • Cojocaru, Alexandru, 2014. "Prospects of upward mobility and preferences for redistribution: Evidence from the Life in Transition Survey," European Journal of Political Economy, Elsevier, vol. 34(C), pages 300-314.
  • Handle: RePEc:eee:poleco:v:34:y:2014:i:c:p:300-314
    DOI: 10.1016/j.ejpoleco.2014.03.003
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    More about this item

    Keywords

    POUM hypothesis; Social mobility; Redistributive preferences; Transition economies;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General

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