We consider a model in which educational investments entail productivity gains, signaling power, and social returns. The latter depend on the relative position the agent occupies in one of three di¤erent dimensions: (i) his innate characteristics, (ii) his level of schooling, and (iii) his...

We develop a theory of endogenous political entrenchment in a simple two-party dy- namic model of income redistribution with probabilistic voting. A partially self-interested left-wing party may implement (entrenchment) policies reducing the income of its own constituency, the lower class, in...