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Identity and redistribution

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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.

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Authors and Affiliations

  1. Department of Economics, Stockholm School of Economics, P.O. Box 6501, 113 83, Stockholm, Sweden

    Erik Lindqvist

  2. Research Institute of Industrial Economics, P.O. Box 55665, 102 15, Stockholm, Sweden

    Erik Lindqvist

  3. Institute for International Economic Studies, Stockholm University, 106 91, Stockholm, Sweden

    Robert Östling

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  1. Erik Lindqvist
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  2. Robert Östling
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Correspondence to Robert Östling.

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Lindqvist, E., Östling, R. Identity and redistribution. Public Choice 155, 469–491 (2013). https://doi.org/10.1007/s11127-011-9877-9

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