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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.

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  • 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. Alexandru Cojocaru & Mame Fatou Diagne, 2021. "Redistributive preferences in Europe and Central Asia, 2006–2016," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 29(1), pages 151-172, January.
    5. Obrizan, Maksym, 2019. "Diverging trends in health care use between 2010 and 2016: Evidence from three groups of transition countries," Economic Systems, Elsevier, vol. 43(1), pages 19-29.
    6. 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.
    7. Corneo, Giacomo & Neher, Frank, 2015. "Democratic redistribution and rule of the majority," European Journal of Political Economy, Elsevier, vol. 40(PA), pages 96-109.
    8. Tina Haussen, 2018. "Intra-Household Income Inequality and Preferences for Redistribution," Jena Economic Research Papers 2018-004, Friedrich-Schiller-University Jena.
    9. Yang, Xiaojun & Wen, Qiang & Ma, Jie & Li, Jun, 2020. "Upward mobility and the demand for children: Evidence from China," China Economic Review, Elsevier, vol. 60(C).
    10. Tina Haussen, 2019. "Intra-household income inequality and preferences for redistribution," Review of Economics of the Household, Springer, vol. 17(2), pages 499-530, June.
    11. Gangadharan, Lata & Grossman, Philip J. & Vecci, Joe, 2021. "Moving on up: The impact of income mobility on antisocial behaviour," European Economic Review, Elsevier, vol. 134(C).
    12. JaeYoul Shin, 2018. "Relative Deprivation, Satisfying Rationality, and Support for Redistribution," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 140(1), pages 35-56, November.
    13. Laméris, Maite D. & Garretsen, Harry & Jong-A-Pin, Richard, 2020. "Political ideology and the intragenerational prospect of upward mobility," European Journal of Political Economy, Elsevier, vol. 62(C).
    14. 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.
    15. JaeYoul Shin, 2019. "How Can we Achieve a Sustainable Redistributive Policy? Rethinking the Relationship Between Civic Engagement, Neighborhood Relationship and Labor Market Status," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(1), pages 343-362, February.
    16. Andreoli, Francesco & Olivera, Javier, 2020. "Preferences for redistribution and exposure to tax-benefit schemes in Europe," European Journal of Political Economy, Elsevier, vol. 63(C).
    17. Ambar Narayan & Roy Van der Weide & Alexandru Cojocaru & Christoph Lakner & Silvia Redaelli & Daniel Gerszon Mahler & Rakesh Gupta N. Ramasubbaiah & Stefan Thewissen, 2018. "Fair Progress?," World Bank Publications, The World Bank, number 28428, July.
    18. 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.
    19. World Bank, 2016. "Europe and Central Asia Economic Update, November 2016," World Bank Other Operational Studies, The World Bank, number 25341, September.
    20. Laura Ravazzini & Florian Chávez-Juárez, 2018. "Which Inequality Makes People Dissatisfied with Their Lives? Evidence of the Link Between Life Satisfaction and Inequalities," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 137(3), pages 1119-1143, June.
    21. Kuhn, Andreas, 2019. "The subversive nature of inequality: Subjective inequality perceptions and attitudes to social inequality," European Journal of Political Economy, Elsevier, vol. 59(C), pages 331-344.
    22. Choi, Gwangeun, 2019. "Revisiting the redistribution hypothesis with perceived inequality and redistributive preferences," European Journal of Political Economy, Elsevier, vol. 58(C), pages 220-244.
    23. Cai, Shu & Wang, Jia, 2018. "Less advantaged, more optimistic? Subjective well-being among rural, migrant and urban populations in contemporary China," China Economic Review, Elsevier, vol. 52(C), pages 95-110.

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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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