The Redistributive Consequences of Segregation and Misperceptions
77 Pages Posted: 21 Dec 2017 Last revised: 24 Feb 2022
Date Written: December 21, 2017
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 distribution. 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: Suggested Citation