The Dynamics of Social Identity, Inequality and Redistribution

Christian Ghiglino and Andreas Muller

Janeway Institute Working Papers from Faculty of Economics, University of Cambridge

Abstract: We provide a politico-economic theory of income redistribution with endogenous social identity of voters. Our analysis uncovers a non-monotonic relationship between market income inequality and redistributive taxation in line with the mixed evidence on the sign of their empirical relationship: taxation first increases with wage inequality as all voters identify with others, but then drops sharply as affluent voters switch to identify in-group. We further add ethnicity as an identification attribute. Consistent with existing empirical evidence, our model predicts that the presence of ethnic minorities and across ethnic group inequality reduce redistribution, while within ethnic group wage inequality increases it.

Keywords: Inequality; Probabilistic Voting; Redistribution; Social Class; Social Identity; Tax Rate (search for similar items in EconPapers)
JEL-codes: D64 D71 D72 H20 (search for similar items in EconPapers)
Date: 2023-11-14
New Economics Papers: this item is included in nep-cdm, nep-pbe and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.janeway.econ.cam.ac.uk/working-paper-pdfs/jiwp2320.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cam:camjip:2320

Access Statistics for this paper

More papers in Janeway Institute Working Papers from Faculty of Economics, University of Cambridge
Bibliographic data for series maintained by Jake Dyer ().