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Identity and redistribution

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  • Erik Lindqvist

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  • Robert Östling

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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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    Citations

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    Cited by:

    1. Joan Costa-i-Font & Frank Cowell, 2015. "European Identity and Redistributive Preferences," CESifo Working Paper Series 5412, CESifo Group Munich.
    2. Gilles Le Garrec, 2014. "Fairness, socialization and the cultural deman for redistribution," Sciences Po publications 2014-20, Sciences Po.
    3. Erik Lindqvist & Robert Östling, 2013. "Identity and redistribution," Public Choice, Springer, vol. 155(3), pages 469-491, June.
    4. Schottke, Alessa Kristin & Siemering, Christian, 2016. "Status Concerns and the Schooling Decision," Annual Conference 2016 (Augsburg): Demographic Change 145908, Verein für Socialpolitik / German Economic Association.
    5. Fong, Christina M. & Luttmer, Erzo F. P., 2009. "Do Race and Fairness Matter in Generosity? Evidence from a Nationally Representative Charity Experiment," Working Paper Series rwp09-014, Harvard University, John F. Kennedy School of Government.
    6. Pierre Kohler, 2012. "The Effect of Host Society Culture on Migrant Wage Discrimination: Approaching the Roestigraben," IHEID Working Papers 08-2012, Economics Section, The Graduate Institute of International Studies.
    7. Horváth, Ágnes & Janky, Béla, 2014. "Ethnic stereotypes and preferences on poverty assistance," Economics Discussion Papers 2014-35, Kiel Institute for the World Economy (IfW).
    8. John Smith, 2012. "Reputation, Social Identity and Social Conflict," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(4), pages 677-709, August.
    9. Barnett, Richard & Bhattacharya, Joydeep & Bunzel, Helle, 2012. "Voting for immiserizing income redistribution in the Meltzer-Richard model," School of Economics Working Paper Series 2012-15, LeBow College of Business, Drexel University.
    10. Kohler, Pierre, 2012. "Three essays on the economic and cultural integration of migrants in Switzerland: putting into perspective the influence of economic discrimination and of host society culture," MPRA Paper 38129, University Library of Munich, Germany.
    11. Wagener, Andreas & Kolmar, Martin, 2011. "Group Identities in Conflicts," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48694, Verein für Socialpolitik / German Economic Association.
    12. Gilles Le Garrec, 2014. "Fairness, socialization and the cultural deman for redistribution," Documents de Travail de l'OFCE 2014-20, Observatoire Francais des Conjonctures Economiques (OFCE).
    13. Holm, Joshua, 2016. "A model of redistribution under social identification in heterogeneous federations," Journal of Public Economics, Elsevier, vol. 143(C), pages 39-48.
    14. Freier, Ronny & Geys, Benny & Holm, Joshua, 2016. "Religious heterogeneity and fiscal policy: Evidence from German reunification," Journal of Urban Economics, Elsevier, vol. 94(C), pages 1-12.
    15. Sabine Flamand, 2015. "Interregional transfers, group loyalty and the decentralization of redistribution," Economics of Governance, Springer, vol. 16(4), pages 307-330, November.
    16. Richard C. Barnett & Joydeep Bhattacharya & Helle Bunzel, 2014. "Voting For Income-Immiserizing Redistribution In The Meltzer–Richard Model," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 682-695, April.
    17. Paetzel, Fabian & Sausgruber, Rupert, 2017. "Entitlements and Loyalty in Groups: An Experimental Study," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168224, Verein für Socialpolitik / German Economic Association.
    18. Christian Houle, 2017. "Inequality, ethnic diversity, and redistribution," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(1), pages 1-23, March.
    19. Benny Geys & Kai A. Konrad, 2016. "Patriotism and Taxation," Working Papers tax-mpg-rps-2016-11, Max Planck Institute for Tax Law and Public Finance.

    More about this item

    Keywords

    Redistribution; Social identity; Income inequality; Ethnic fractionalization; Ethnic diversity; Social class;

    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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