IZA DP No. 15613: Preference for Redistribution during Structural Change with Labor Mobility Frictions
published online in: European Journal of Political Economy, 29 September 2022, 102316
Thorough structural change occurs periodically across world economies. In a parsimonious overlapping generation setup with political economy, we present a novel result: structural change not only exacerbates the rise in inequality but also strengthens the preference for redistribution. Labor mobility frictions are instrumental in this mechanism.