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Social Mobility and the Demand for Redistribution : the POUM Hypothesis

  • Bénabou, Roland
  • Ok, Efe

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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Paper provided by Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 78.

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Date of creation: 1997
Date of revision: 1999
Handle: RePEc:ide:wpaper:701
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  1. Thomas Piketty, 1994. "Social Mobility and Redistributive Politics," Working papers 94-15, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Pierre-Olivier Gourinchas & Jonathan A. Parker, 2002. "Consumption Over the Life Cycle," Econometrica, Econometric Society, vol. 70(1), pages 47-89, January.
  3. Dardanoni Valentino, 1993. "Measuring Social Mobility," Journal of Economic Theory, Elsevier, vol. 61(2), pages 372-394, December.
  4. Bénabou, Roland & Ok, Efe A, 1998. "Social Mobility and the Demand for Redistribution: the POUM Hypothesis," CEPR Discussion Papers 1955, C.E.P.R. Discussion Papers.
  5. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
  6. Francisco Marhuenda & Ignacio Ortuño Ortín, 1995. "Popular Support For Progressive Taxation," Working Papers. Serie AD 1995-15, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  7. Alesina, Alberto F & Rodrik, Dani, 1991. "Distributive Politics and Economic Growth," CEPR Discussion Papers 565, C.E.P.R. Discussion Papers.
  8. Roemer, John E., 1998. "Why the poor do not expropriate the rich: an old argument in new garb," Journal of Public Economics, Elsevier, vol. 70(3), pages 399-424, December.
  9. Marhuenda, Francisco & Ortuno-Ortin, Ignacio, 1995. "Popular support for progressive taxation," Economics Letters, Elsevier, vol. 48(3-4), pages 319-324, June.
  10. Louis Putterman & John E. Roemer & Joaquim Silvestre, . "Does Egalitarianism Have A Future?," Department of Economics 96-09, California Davis - Department of Economics.
  11. Hirschman, Albert O & Rothschild, Michael, 1973. "The Changing Tolerance for Income Inequality in the Course of Economic Development; with a Mathematical Appendix," The Quarterly Journal of Economics, MIT Press, vol. 87(4), pages 544-66, November.
  12. Durlauf, S.N. & Cooper, S.J. & Johnson, P.A., 1993. "On the Evolution of Economic Status Across Generations," Working papers 9329, Wisconsin Madison - Social Systems.
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