Munich Personal RePEc Archive

Social Identity, Redistribution, and Development

Yuki, Kazuhiro (2023): Social Identity, Redistribution, and Development.

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Empirical works suggest that income redistribution promotes economic growth and development by reducing inequality and increasing educational investment of the poor. However, the scale of redistribution, to be precise, the inequality-reducing effect of taxes and transfers, is limited in many developing countries. Why is the scale of redistribution small, and how does it affect development? This paper focuses on the role of social identity, whose importance in redistribution and development is supported in existing empirical studies. Under what conditions is national identity realized, and how does it affect the economic outcomes? To answer the questions, this paper develops a dynamic model of income redistribution and educational investment augmented with social identification and explores the interaction among identity, redistribution, and development theoretically.

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