Inequality, Segregation, and Redistribution
In a model of endogenous choice of location and endogenous aversion against inequality, we demonstrate that large pre-tax difference in income may lead to a residential segregation of rich and poor. Such segregation may reduce the social attachment between the groups in society, and reduce the willingness of the rich to make transfers to the poor.
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|Date of creation:||2000|
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94-15, Massachusetts Institute of Technology (MIT), Department of Economics.
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- W.Norton Grubb, 1982. "The Dynamic Implications of the Tiebout Model: the Changing Composition of Boston Communities, 1960-1970," Public Finance Review, , vol. 10(1), pages 17-38, January.
- Perotti, Roberto, 1996. "Growth, Income Distribution, and Democracy: What the Data Say," Journal of Economic Growth, Springer, vol. 1(2), pages 149-87, June.
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- Horstmann, Ignatius J & Scharf, Kimberley, 1999. "The New Federalism: Distributional Conflict, Voluntarism and Segregation," CEPR Discussion Papers 2273, C.E.P.R. Discussion Papers.
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