Social Mobility and the Demand for Redistribution: The POUM Hypothesis
Even people with income below average will not support high rates of redistribution, because of the prospect of upward mobility: they take into account the fact the they, or their children, may move up in the income distribution, and therefore be hurt by high tax rates. This "intuitive" hypothesis is commonly advanced as part of the explanation for why democracies, where a relatively poor majority holds the political power, do not engage in large-scale expropriation and redistribution. But does it make sense, or does it require that some of the poor overemphasize the prospects of good outcomes relative to bad ones, due either to irrationally optimistic expectations or to a form of risk-loving?
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- Alberto Alesina & Dani Rodrik, 1991.
"Distributive Politics and Economic Growth,"
NBER Working Papers
3668, National Bureau of Economic Research, Inc.
- Dardanoni Valentino, 1993. "Measuring Social Mobility," Journal of Economic Theory, Elsevier, vol. 61(2), pages 372-394, December.
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