The Political Economy of Occupational Mobility and Redistribution PolicyNo 08-18, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics Abstract: In this study, we ask why countries with similar labor market characteristics experience different occupational mobility levels and redistribution policies. We develop a politico-economic model that integrates occupational mobility affected by individual educational investments with voting on redistribution policies. It is shown that a rigid labor market will tend to produce multiple equilibria: a poor-majority equilibrium with lower mobility and higher redistribution and a rich-majority equilibrium with higher mobility and lower redistribution. However, a flexible labor market will tend to produce a unique, poor-majority equilibrium with high mobility and low redistribution, which supports the POUM (prospect of upward mobility) hypothesis. Deregulation in the labor market enhances mobility but may degrade social welfare. Keywords: Occupational mobility; Political economy; Stationary Markov perfect equilibrium; Redistribution (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:0818 Access Statistics for this paper More papers in Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics Contact information at EDIRC. |
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