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Inequality, redistribution and cultural integration in the Welfare State

Alberto Bisin () and Thierry Verdier ()

No 11916, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper constructs a simple theoretical political economy model to analyze the dynamic interactions between redistribution, public good provision and cultural integration of minority groups. Cultural differentiation erodes the support for general public good provision and vertical redistribution, reducing in turn the attractiveness of adoption of the mainstream culture by the minority groups. Our model shows the possibility for multiple politico-cultural steady state trajectories depending strongly on the initial degree of cultural differentiation in the society. An exogenous increase in income inequality is shown to increase the likelihood of multiple steady state trajectories. In a context with multiple minority groups, culltural fragmentation favors integration into the mainstream culture.

Keywords: cultural integration; inequality; political economy; redistribution (search for similar items in EconPapers)
JEL-codes: J13 J15 Z10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-evo, nep-ltv, nep-mic, nep-pbe and nep-pol
Date: 2017-03
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