Inequality, redistribution and cultural integration in the Welfare State

Alberto Bisin, Thierry Verdier

    Research output: Contribution to journalArticle

    Abstract

    This paper constructs a simple theoretical political economy model to analyze the dynamic interactions between redistribution, public good provision and cultural integration of minority groups. Cultural differentiation erodes the support for general public good provision and vertical redistribution, reducing in turn the attractiveness of adoption of the mainstream culture by the minority groups. Our model shows the possibility for multiple politico-cultural steady state trajectories depending strongly on the initial degree of cultural differentiation in the society. An exogenous increase in income inequality is shown to increase the likelihood of multiple steady state trajectories. In a context with multiple minority groups, cultural fragmentation favors integration into the mainstream culture.

    Original languageEnglish (US)
    Pages (from-to)122-140
    Number of pages19
    JournalEuropean Journal of Political Economy
    Volume50
    DOIs
    StatePublished - Dec 2017

    Keywords

    • Cultural integration
    • Inequality
    • Political economy
    • Redistribution

    ASJC Scopus subject areas

    • Economics and Econometrics
    • Political Science and International Relations

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