The impact of taxes and social spending on inequality and poverty in Argentina, Bolivia, Brazil, Mexico, Peru and Uruguay: An overview

Nora Lustig, Florencia Amábile, Marisa Bucheli, George Gray Molina, Sean Higgins (), Miguel Jaramillo, Wilson Jiménez Pozo, Veronica Paz Arauco, Claudiney Pereira, Carola Pessino, Maximo Rossi, John Scott and Ernesto Yáñez Aguilar
Additional contact information
George Gray Molina: Affilitation available at www.commitmentoequity.org
Wilson Jiménez Pozo: Affilitation available at www.commitmentoequity.org
Veronica Paz Arauco: Affilitation available at www.commitmentoequity.org
Ernesto Yáñez Aguilar: Affilitation available at www.commitmentoequity.org

No 315, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: How much redistribution and poverty reduction is being accomplished in Latin America through social spending, subsidies, and taxes? Standard fiscal incidence analyses applied to Argentina, Bolivia, Brazil, Mexico, Peru, and Uruguay using a comparable methodology yields the following results. Direct taxes and cash transfers reduce inequality and poverty by nontrivial amounts in Argentina, Brazil, and Uruguay but less so in Bolivia, Mexico, and Peru. While direct taxes are progressive, the redistributive impact is small because direct taxes as a share of GDP are generally low. Cash transfers are quite progressive in absolute terms, except in Bolivia where programs are not targeted to the poor. In Bolivia and Brazil, indirect taxes more than offset the poverty-reducing impact of cash transfers. When one includes the in-kind transfers in education and health, valued at government costs, they reduce inequality in all countries by considerably more than cash transfers, reflecting their relative size.

Keywords: fiscal incidence; inequality; poverty; taxes; social spending; Latin America. (search for similar items in EconPapers)
JEL-codes: H22 I3 O1 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2013-11
New Economics Papers: this item is included in nep-lam, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://www.ecineq.org/milano/WP/ECINEQ2013-315.pdf (application/pdf)

Related works:
Working Paper: The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, Peru and Uruguay: An Overview (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inq:inqwps:ecineq2013-315

Access Statistics for this paper

More papers in Working Papers from ECINEQ, Society for the Study of Economic Inequality Contact information at EDIRC.
Bibliographic data for series maintained by Maria Ana Lugo ( this e-mail address is bad, please contact ).