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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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    Cited by:

    1. Tina Haußen, 2014. "Yours, mine & ours - The role of gender and (equivalence) income in preferences for redistribution and public spending," Jena Economic Research Papers 2014-033, Friedrich-Schiller-University Jena.
    2. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute of Labor Economics (IZA).
    3. Cojocaru, Alexandru & Diagne, Mame Fatou, 2014. "Should income inequality be reduced and who should benefit ? redistributive preferences in Europe and Central Asia," Policy Research Working Paper Series 7097, The World Bank.
    4. repec:eee:ecosys:v:43:y:2019:i:1:p:19-29 is not listed on IDEAS
    5. Harald Lang & Florian Morath, 2015. "A Glance into the Tunnel: Experimental Evidence on Income Comparisons under Uncertainty," Working Papers tax-mpg-rps-2015-13, Max Planck Institute for Tax Law and Public Finance.
    6. Corneo, Giacomo & Neher, Frank, 2015. "Democratic redistribution and rule of the majority," European Journal of Political Economy, Elsevier, vol. 40(PA), pages 96-109.
    7. Tina Haussen, 2018. "Intra-Household Income Inequality and Preferences for Redistribution," Jena Economic Research Papers 2018-004, Friedrich-Schiller-University Jena.
    8. repec:kap:reveho:v:17:y:2019:i:2:d:10.1007_s11150-018-9410-8 is not listed on IDEAS
    9. repec:spr:soinre:v:140:y:2018:i:1:d:10.1007_s11205-017-1769-z is not listed on IDEAS
    10. Maite D. Laméris & Harry Garretsen & Richard Jong-A-Pin, 2018. "Political Ideology and the Intragenerational Prospect of Upward Mobility," CESifo Working Paper Series 6987, CESifo Group Munich.
    11. Andrew E. Clark & Conchita d'Ambrosio, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," Working Papers halshs-00967938, HAL.
    12. Obrizan, Maksym, 2017. "Does EU membership prevent crowding out of public health care? Evidence from 28 transition countries," MPRA Paper 81708, University Library of Munich, Germany.
    13. repec:spr:soinre:v:142:y:2019:i:1:d:10.1007_s11205-018-1922-3 is not listed on IDEAS
    14. Francesco Andreoli & Javier Olivera, 2019. "Preferences for redistribution and exposure to tax-benefit schemes in Europe," Working Papers 508, ECINEQ, Society for the Study of Economic Inequality.
    15. repec:wbk:wbpubs:28428 is not listed on IDEAS
    16. Sophie Harnay & Elisabeth Tovar, 2017. "Obeying vs. resisting unfair laws. A structural analysis of the internalization of collective preferences on redistribution using classification trees and random forests," EconomiX Working Papers 2017-34, University of Paris Nanterre, EconomiX.
    17. World Bank, "undated". "Europe and Central Asia Economic Update, November 2016," World Bank Other Operational Studies 25341, The World Bank.
    18. repec:spr:soinre:v:137:y:2018:i:3:d:10.1007_s11205-017-1623-3 is not listed on IDEAS
    19. repec:eee:poleco:v:59:y:2019:i:c:p:331-344 is not listed on IDEAS
    20. repec:eee:poleco:v:58:y:2019:i:c:p:220-244 is not listed on IDEAS
    21. repec:eee:chieco:v:52:y:2018:i:c:p:95-110 is not listed on IDEAS

    More about this item

    Keywords

    POUM hypothesis; Social mobility; Redistributive preferences; Transition economies;

    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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