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Identity and redistribution

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Listed:
  • Erik Lindqvist
  • Robert Östling

Abstract

This paper models the interaction between individuals’ identity choices and redistribution. Both redistributive policies and identity choices are endogenous, and there might be multiple equilibria. The model is applied to ethnicity and social class. In an equilibrium with high taxes, the poor identify as poor and favor high taxes. In an equilibrium with low taxes, at least some of the poor identify with their ethnic group and favor low taxes. The model predicts that redistribution is highest when society is ethnically homogeneous, but the effect of ethnic diversity on redistribution is not necessarily monotonic. Copyright Springer Science+Business Media, LLC 2013

Suggested Citation

  • Erik Lindqvist & Robert Östling, 2013. "Identity and redistribution," Public Choice, Springer, vol. 155(3), pages 469-491, June.
  • Handle: RePEc:kap:pubcho:v:155:y:2013:i:3:p:469-491
    DOI: 10.1007/s11127-011-9877-9
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    More about this item

    Keywords

    Redistribution; Social identity; Income inequality; Ethnic fractionalization; Ethnic diversity; Social class;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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