TY - JOUR
T1 - Social mobility and the demand for redistribution
T2 - The POUM hypothesis
AU - Benabou, Roland
AU - Ok, Efe A.
N1 - Funding Information:
* We thank Abhijit Banerjee, Jess Benhabib, Edward Glaeser, Levent Koc¸k-esen, Ignacio Ortuño-Ortin, three anonymous referees, seminar participants at the Massachusetts Institute of Technology, and the Universities of Maryland and Michigan, New York University, the University of Pennsylvania, Universitat Pompeu Fabra, Princeton University, and Université de Toulouse for their helpful comments. The first author gratefully acknowledges financial support from the National Science Foundation (SBR–9601319), and the MacArthur Foundation. Both authors are grateful for research support to the C. V. Starr Center at New York University.
PY - 2001/5
Y1 - 2001/5
N2 - This paper examines the often stated idea that the poor do not support high levels of redistribution because of the hope that they, or their offspring, may make it up the income ladder. This "prospect of upward mobility" (POUM) hypothesis is shown to be fully compatible with rational expectations, and fundamentally linked to concavity in the mobility process. A steady-state majority could even be simultaneously poorer than average in terms of current income, and richer than average in terms of expected future incomes. A first empirical assessment suggests, on the other hand, that in recent U. S. data the POUM effect is probably dominated by the demand for social insurance.
AB - This paper examines the often stated idea that the poor do not support high levels of redistribution because of the hope that they, or their offspring, may make it up the income ladder. This "prospect of upward mobility" (POUM) hypothesis is shown to be fully compatible with rational expectations, and fundamentally linked to concavity in the mobility process. A steady-state majority could even be simultaneously poorer than average in terms of current income, and richer than average in terms of expected future incomes. A first empirical assessment suggests, on the other hand, that in recent U. S. data the POUM effect is probably dominated by the demand for social insurance.
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U2 - 10.1162/00335530151144078
DO - 10.1162/00335530151144078
M3 - Article
AN - SCOPUS:0040756390
SN - 0033-5533
VL - 116
SP - 447
EP - 487
JO - Quarterly Journal of Economics
JF - Quarterly Journal of Economics
IS - 2
ER -