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Voting, education, and the Great Gatsby Curve

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  • Rauh, Christopher

Abstract

High inequality goes hand in hand with low intergenerational earnings mobility across countries. Little is known about why the US is characterized by high inequality and low mobility, while the opposite tends to hold for Scandinavian countries. In an overlapping generations model, calibrated to the US, education policies are endogenized via probabilistic voting. By exploiting cross-country variation in the bias in voter turnout towards the educated and elderly, the model replicates the negative relation between inequality and public education expenditures and accounts for more than a quarter of the variation in inequality and mobility. For the US, I find that compulsory voting could foster mobility, whereas inequality would be hardly affected.

Suggested Citation

  • Rauh, Christopher, 2017. "Voting, education, and the Great Gatsby Curve," Journal of Public Economics, Elsevier, vol. 146(C), pages 1-14.
  • Handle: RePEc:eee:pubeco:v:146:y:2017:i:c:p:1-14
    DOI: 10.1016/j.jpubeco.2016.12.005
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    Cited by:

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    3. Campos, Luciano & Casas, Agustín, 2020. "Populism and income redistribution," Economics Letters, Elsevier, vol. 186(C).
    4. Gallipoli, Giovanni & Low, Hamish & Mitra, Aruni, 2020. "Consumption and Income Inequality across Generations," CEPR Discussion Papers 15166, C.E.P.R. Discussion Papers.
    5. Klaus Prettner & Andreas Schaefer, 2021. "The U‐Shape of Income Inequality over the 20th Century: The Role of Education," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(2), pages 645-675, April.
    6. Giovanni Gallipoli & Hamish Low & Aruni Mitra, 2020. "We characterize the joint evolution of cross-sectional inequality in income and consumption across generations. We estimate a model of intergenerational persistence and separately identify influences ," Working Papers 2020-061, Human Capital and Economic Opportunity Working Group.
    7. Pier-André Bouchard St-Amant & Jean-Denis Garon & Nicolas Marceau, 2020. "Uncovering Gatsby Curves," CESifo Working Paper Series 8049, CESifo.
    8. Peng, Baochun, 2021. "Positional competition: A theory of the Great Gatsby curve and the Easterlin paradox," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 562-575.
    9. Brotherhood, Luiz & Delalibera, Bruno R., 2020. "Minding the gap between schools and universities," Journal of Economic Dynamics and Control, Elsevier, vol. 120(C).

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