The Survival of the Welfare State
John Hassler,José V. Rodríguez Mora,Kjetil Storesletten,Fabrizio Zilibotti,Fabrizio Zilibotti +4 more
TLDR
This article provided an analytical characterization of Markov perfect equilibria in a model with repeated voting, where agents vote over distortionary income redistribution, and showed that the future constituency for redistributive policies depends positively on current redistribution since this affects both private investments and the future distribution of voters.Abstract:
This paper provides an analytical characterization of Markov perfect equilibria in a model with repeated voting, where agents vote over distortionary income redistribution. A key result is that the future constituency for redistributive policies depends positively on current redistribution, since this affects both private investments and the future distribution of voters. The model features multiple equilibria. In some equilibria, positive redistribution persists forever. In other equilibria, even a majority of beneficiaries of redistribution vote strategically so as to induce the end of the welfare state next period. Skill-biased technical change makes the survival of the welfare state less likely.read more
Citations
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Persistence of Power, Elites and Institutions
Daron Acemoglu,James A. Robinson +1 more
TL;DR: In this article, the authors construct a model to study the implications of changes in political insti? tutions for economic institutions and provide conditions under which economic or policy outcomes will be invariant to changes in the political institutions, and economic institutions them? selves will persist over time.
Journal ArticleDOI
Belief in a Just World and Redistributive Politics
Roland Bénabou,Jean Tirole +1 more
TL;DR: This article developed a theory of collective beliefs and motivated cognitions, including those concerning money (consumption) and happiness, as well as religion, to explain why most people feel such a need to believe in a "just world" and why this need, and therefore the prevalence of the belief, varies considerably across countries.
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A dynamic theory of public spending, taxation and debt
Marco Battaglini,Stephen Coate +1 more
TL;DR: In this article, the authors present a dynamic political economy theory of public spending, taxation and debt, where policy choices are made by a legislature consisting of representatives elected by geographically defined districts.
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Time-Consistent Public Policy
TL;DR: In this article, the authors characterize and solve for Markov-perfect equilibria of the dynamic game between successive governments, and find that when the only tax base available to the government is capital income, the government still refrains from taxing at confiscatory rates.
Journal ArticleDOI
The macroeconomics of child labor regulation
TL;DR: This article developed a positive theory of the adoption of child labor laws and showed that workers who compete with children in the labor market support a child labor ban, unless their own working children provide a large fraction of family income.
References
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Book
An Economic Theory of Democracy
TL;DR: Downs presents a rational calculus of voting that has inspired much of the later work on voting and turnout as discussed by the authors, particularly significant was his conclusion that a rational voter should almost never bother to vote.
Journal ArticleDOI
A Rational Theory of the Size of Government
Allan H Meltzer,Scott F. Richard +1 more
TL;DR: In a general equilibrium model of a labor economy, the size of government, measured by the share of income redistributed, is determined by majority rule as mentioned in this paper, where voters rationally anticipate the disincentive effects of taxation on the labor-leisure choices of their fellow citizens and take the effect into account when voting.
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Changes in Relative Wages, 1963–1987: Supply and Demand Factors
Lawrence F. Katz,Kevin M. Murphy +1 more
TL;DR: A simple supply and demand framework is used to analyze changes in the U.S. wage structure from 1963 to 1987 as discussed by the authors, showing that rapid secular growth in the demand for more-educated workers, "more-skilled" workers, and females appears to be the driving force behind observed changes in wage structure.
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Distributive Politics and Economic Growth
Alberto Alesina,Dani Rodrik +1 more
TL;DR: This paper analyzed the relationship between economics and politics and concluded that inequality is conducive to the adoption of growth-retarding policies, and presented cross-country evidence consistent with it. But their analysis focused on how an economy's initial configuration of resources shapes the political struggle for income and wealth distribution, and how that, in turn, affects long run growth.
Book
Is inequality harmful for growth
Torsten Persson,Guido Tabellini +1 more
TL;DR: In this article, a theoretical model for the relationship between inequality and economic growth is proposed, and the model implications are supported by the evidence that both historical panel data and post-war cross-sectional data indicate a significant and large negative relation between inequalities and growth.