Religion, Income Inequality, and the Size of the Government

Ceyhun Elgin, Turkmen Goksel (), Mehmet Gurdal and Cuneyt Orman ()

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: Recent empirical research has demonstrated that countries with higher levels of religiosity are characterized by greater income inequality. We argue that this is due to the lower level of government services demanded in more religious countries. Religion motivates individuals to engage in charitable giving and this leads them to prefer making their contributions privately and voluntarily rather than through the state. To the extent that citizen preferences are reflected in policy outcomes, religiosity results in lower levels of taxes and hence lower levels of spending on both public goods and redistribution. Since measures of income typically do not fully take into account private transfers received, this increases measured income inequality. We formalize these ideas in a general equilibrium political economy model and also show that the implications of our model are supported by cross-country data.

Keywords: religion; voluntary donations; taxation; redistribution; income inequality (search for similar items in EconPapers)
JEL-codes: D63 H20 Z12 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-pbe and nep-soc
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN ... g+Paperss/2012/12-08 (application/pdf)

Related works:
Journal Article: Religion, income inequality, and the size of the government (2013)
Working Paper: Religion, Income Inequality, and the Size of the Government (2010)
Working Paper: Religion, Income Inequality, and the Size of the Government (2010)
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:tcb:wpaper:1208

Access Statistics for this paper

More papers in Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey Contact information at EDIRC.
Bibliographic data for series maintained by Sermet Pekin () and Ilker Cakar () and ().