Voting over redistribution in the Meltzer–Richard model under interdependent labor inputs

Authors

Armando R. Lopez-Velasco, The University of Texas Rio Grande Valley

Document Type

Article

Publication Date

7-2020

Abstract

This paper extends the median voter result of Meltzer and Richard (1981) to the case where a labor economy has any constant returns to scale production function under quasilinear preferences with constant wage elasticity. Average productivities of the different labor inputs depend on their relative abundance in the economy. Agents are heterogeneous due to their labor type and (given type) due to their relative efficiency. They vote over income tax rates which in turn dictate the level of redistribution. The paper shows that preferences over tax rates are single-peaked and hence the median voter theorem applies. This framework connects the scarcity of inputs to the most preferred tax rates.

Comments

Original published version available at https://doi.org/10.1016/j.econlet.2020.109206

Recommended Citation

Lopez-Velasco, A.R., 2020. Voting over redistribution in the Meltzer–Richard model under interdependent labor inputs. Economics Letters 192, 109206. https://doi.org/10.1016/j.econlet.2020.109206

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.

Publication Title

Economics Letters

DOI

10.1016/j.econlet.2020.109206