Social Mobility and the Demand for Redistribution: The POUM Hypothesis

Roland Benabou and Efe Ok

Working Papers from C.V. Starr Center for Applied Economics, New York University

Abstract: Even people with income below average will not support high rates of redistribution, because of the prospect of upward mobility: they take into account the fact the they, or their children, may move up in the income distribution, and therefore be hurt by high tax rates. This "intuitive" hypothesis is commonly advanced as part of the explanation for why democracies, where a relatively poor majority holds the political power, do not engage in large-scale expropriation and redistribution. But does it make sense, or does it require that some of the poor overemphasize the prospects of good outcomes relative to bad ones, due either to irrationally optimistic expectations or to a form of risk-loving?

Keywords: INCOME DISTRIBUTION; POLITICAL ECONOMY; TAXATION; SOCIAL MOBILITY (search for similar items in EconPapers)
JEL-codes: D31 D72 H20 P16 (search for similar items in EconPapers)
Pages: 31 pages
Date: 1998
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Citations: View citations in EconPapers (25)

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Related works:
Journal Article: Social Mobility and the Demand for Redistribution: The Poum Hypothesis (2001)
Working Paper: Social Mobility and the Demand for Redistribution: the POUM Hypothesis (1999)
Working Paper: Social Mobility and the Demand for Redistribution: the POUM Hypothesis (1998)
Working Paper: Social Mobility and the Demand for Redistribution: The POUM Hypothesis (1998)
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