Inequality and the Politics of Redistribution

Tetsuo Ono

No 12-09-Rev.2, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper analyzes the political economy of public education and in-cash trans- fer in an overlapping generations model of a two-class society in which the dynamics of inequality is driven by the accumulation of human capital. The two redistributive policies are determined by voting, while private education that supplements public education is purchased individually. The model, which includes two-dimensional voting, demonstrates either of the following two types of stable steady-state equilib- ria, which are in line with the evidence: a high-inequality equilibrium with govern- ment expenditure favoring lump-sum transfer, or a low-inequality equilibrium with that favoring public education.

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: 2013-10, Revised 2014-09
New Economics Papers: this item is included in nep-cdm, nep-dge, nep-pbe and nep-pol
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Journal Article: Inequality and the politics of redistribution (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:1209r2

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