Inequality Dynamics and the Politics of Redistribution

Tetsuo Ono

No 12-09-Rev, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper analyzes the political economy of public education and lump-sum transfer in an overlapping-generation model of a two-class society in which the dy- namics of inequality is driven by the accumulation of human capital. The two redistributive policies are determined by voting, while private education which sup- plements public education is purchased individually. The model, which includes two-dimensional voting, demonstrates the following two types of stable steady-state equilibria which are in line with the evidence: a high-inequality equilibrium with government spending in favor of public education, and a low-inequality equilibrium with government spending in favor of lump-sum transfer.

Keywords: Public education; political economy; inequality (search for similar items in EconPapers)
JEL-codes: D72 D91 I24 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2012-05, Revised 2013-11
New Economics Papers: this item is included in nep-cdm, nep-dge, nep-pbe and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:1209r

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