published in: Research on Economic Inequality, 2004, 11, 15-136
The “prospect of upward mobility” (POUM) hypothesis formalised by Benabou and Ok
(2001a) finds explicit assumptions under which some individuals that are poorer than the
average optimally choose to oppose redistribution policies. The underlying intuition is that
these individuals rationally expect to be richer than average in the future. This result holds
provided the mobility process is concave in expectations, redistribution policies are expected
to last for a sufficiently long period and individuals are not too risk averse. This paper tests
the POUM hypothesis by means of a within subjects experiment where the concavity of the
mobility process, the degree of social mobility, the knowledge of personal income and the
degree of inequality are used as treatments. Other determinants of the demand for
redistribution, such as risk aversion and inequality aversion are (partially) controlled for via
either the experiment design or the information collected during the experiment. We find that
the POUM hypothesis holds under alternative specifications, even when we control for
individual fixed effects.
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