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Skills, social mobility, and the support for the welfare state

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  • Rincke, Johannes
  • Schwager, Robert

Abstract

Many welfare schemes discourage low skilled individuals from working. In the same time, there is widespread support for the welfare state among the highly educated. We suggest a model which explains these seemingly contrasting observations. In our approach, intergenerational social mobility is conditional on labour market participation of the parents. Such mobility increases the supply of high skilled labour in the next generation. To protect their children from the associated fall in wages, middle class parents have an incentive to induce unemployment among low skilled parents, and therefore vote for a social transfer.

Suggested Citation

  • Rincke, Johannes & Schwager, Robert, 2005. "Skills, social mobility, and the support for the welfare state," University of Göttingen Working Papers in Economics 48, University of Goettingen, Department of Economics.
    • Handle: RePEc:zbw:cegedp:48
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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