The Political economics of income inequality, government expenditures and redistribution - an empirical study using long-term panel data

Sammanfattning: The thesis aims to further explain the relationship between income inequality, the welfare state and the level of redistribution. We use a dataset containing unbalanced panel data between 1900 and 2010 for 17 economies and use central government expenditures as a share of GDP and top marginal tax rates. Our results do not support the suggestion made by the Marginal Voter Theorem that changes in income inequality affect the level of redistribution.