TY  - RPRT
        AU  - Bossi, Luca
AU  - Gumus, Gulcin
        TI  - Income Inequality, Mobility, and the Welfare State: A Political Economy Model
        PY  - 2011/Aug/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 5909
        UR  - https://www.iza.org/publications/dp5909
        AB  - In this paper, we set up a three-period stochastic overlapping generations model to analyze the implications of income inequality and mobility for demand for redistribution and social insurance. We model the size of two different public programs under the welfare state. We investigate bidimensional voting on the tax rates that determine the allocation of government revenues among transfer payments and old-age pensions. We show that the coalitions formed, the resulting political equilibria, and the demand for redistribution crucially depend on the level of income inequality and mobility.
        KW  - inequality
KW  - redistribution
KW  - structure induced equilibrium
KW  - mobility
        ER  -