The Redistributive Consequences of Segregation

75 Pages Posted: 21 Dec 2017 Last revised: 18 Dec 2020

See all articles by Lisa Windsteiger

Lisa Windsteiger

Max Planck Institute for Tax Law and Public Finance

Date Written: December 21, 2017

Abstract

In this paper I present a model in which an increase in income in-equality can lead to a decrease in voters’ demand for redistribution. In my model, people sort into groups according to income and as a result they become biased about the shape of the income distri-bution. I demonstrate that an increase in inequality can lead to a decrease in perceived inequality in the presence of segregation, and hence to a fall in people’s support for redistribution.

Keywords: Personal Income Distribution, Inequality, Redistribution

JEL Classification: D31, D83, H24, H53

Suggested Citation

Windsteiger, Lisa, The Redistributive Consequences of Segregation (December 21, 2017). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2017-12, Available at SSRN: https://ssrn.com/abstract=3091493 or http://dx.doi.org/10.2139/ssrn.3091493

Lisa Windsteiger (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

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