Scandinavian Working Papers in Economics

Research Papers in Economics,
Stockholm University, Department of Economics

No 2005:9: Young Liberals and Old Conservatives - Inequality, Mobility and Redistribution

Astri Muren () and Sten Nyberg ()
Additional contact information
Astri Muren: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden
Sten Nyberg: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden

Abstract: The paper examines the impact of income inequality and mobility on income redistribution in a modified median voter model where redistributive conflict takes place both between educational groups and age-groups. The effects of inequality and mobility are not unambiguous but depend on factors such as how mobility changes in different groups and causes of inequality. We also examine the effect of the length of electoral periods on redistribution and welfare for different groups and allow for majority voting on the length of electoral periods. Finally, we extend the model to encompass retirement and baby booms.

Keywords: Inequality; mobility; income redistribution; median voter; age-earnings profiles

JEL-codes: D31; D72; H20; J31; P16

32 pages, September 30, 2005

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