To get Rich is Glorious, but only if Fairly

20 Pages Posted: 22 Apr 2021 Last revised: 2 May 2021

See all articles by Guido Cozzi

Guido Cozzi

University of St. Gallen

Noemi Mantovan

Bangor University - Bangor University

Date Written: April 21, 2021

Abstract

The United States witnessed an increase in pre-tax inequality, a rise in the wealth-to-income ratio, and an extraordinary rise in top income inequality in the last four decades. However, income and wealth tax rates did not increase. To explain this, we build a political economy model in which people care about fairness and approve of getting rich due to creating value rather than extracting value from others. Simulations and calibrations show that rational voters can allow for low levels of redistribution even as they observe a sharp increase in inequality.

Keywords: Political Economy; Fairness; Redistribution; Globalization

JEL Classification: H31, O40

Suggested Citation

Cozzi, Guido and Mantovan, Noemi, To get Rich is Glorious, but only if Fairly (April 21, 2021). Available at SSRN: https://ssrn.com/abstract=3831060 or http://dx.doi.org/10.2139/ssrn.3831060

Guido Cozzi

University of St. Gallen ( email )

Noemi Mantovan (Contact Author)

Bangor University - Bangor University ( email )

Bangor, Wales LL57 2DG
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
64
Abstract Views
355
rank
475,919
PlumX Metrics