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Public Choice

, Volume 155, Issue 3–4, pp 469–491 | Cite as

Identity and redistribution

  • Erik Lindqvist
  • Robert ÖstlingEmail author
Article

Abstract

This paper models the interaction between individuals’ identity choices and redistribution. Both redistributive policies and identity choices are endogenous, and there might be multiple equilibria. The model is applied to ethnicity and social class. In an equilibrium with high taxes, the poor identify as poor and favor high taxes. In an equilibrium with low taxes, at least some of the poor identify with their ethnic group and favor low taxes. The model predicts that redistribution is highest when society is ethnically homogeneous, but the effect of ethnic diversity on redistribution is not necessarily monotonic.

Keywords

Redistribution Social identity Income inequality Ethnic fractionalization Ethnic diversity Social class 

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Supplementary material

11127_2011_9877_MOESM1_ESM.pdf (186 kb)
Online Appendix for “Identity and Redistribution” (PDF 185 kB)

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Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.Department of EconomicsStockholm School of EconomicsStockholmSweden
  2. 2.Research Institute of Industrial EconomicsStockholmSweden
  3. 3.Institute for International Economic StudiesStockholm UniversityStockholmSweden

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