This study extends the multi-country, politico-economic model of fiscal policy developed by Song, Storesletten, and Zilibotti (2012) to incorporate wage inequality within each country. In this extended framework, we present conflict within and across generations over fiscal policy and show that...

This paper introduces an overlapping-generations model with earnings hetero- geneity and borrowing constraints. The labor income tax and the allocation of tax revenue between social security and forward intergenerational public goods are determined in a bidimensional majoritarian voting game...

This paper presents a politico-economic model that includes a mutual link between life cycle earnings mobility and redistributive politics. The model demonstrates that when an economy features a high opportunity of upward mobility and high risk of downward mobility, it attains a unique...

This paper focuses on how education costs affect the political determination of public policy via individual decision-making. The paper extends the model in Hassler, Storesletten, and Zilibotti (2007, Journal of Economic Theory; henceforth HSZ) by generalizing the cost function of education and...

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...

This paper presents a politico-economic model including a mutual link between earnings mobility and redistribution policy affected by human capital risk. A lowrisk economy produces multiple equilibria: a poor-majority equilibrium with lower mobility and higher redistribution and a rich-majority...

This paper presents a politico-economic model including a mutual link between earnings mobility and redistribution policy affected by human capital risk. The model demonstrates that a low-risk economy produces multiple equilibria: an unskilled- majority equilibrium with lower mobility and higher...

This paper introduces an overlapping generations model with earnings heterogeneity and borrowing constraints. The labor income tax and the allocation of tax revenue across social security and public goods provision are determined in a bidimensional majoritarian voting game played by successive...

Countries with higher implicit taxes on continued work are associated with lower labor force participation rates of the elderly. This paper constructs a politicoeconomic model that accounts for this feature based on multiple, self-fulfilling expectations of agents. In this model, agents are...

This paper characterizes a stationary Markov perfect political equilibrium where agents vote over income taxation that distorts their educational investment. Agents become rich or poor through educational investment, and the poor have a second chance at success. The results show the following...