The contribution of government transfer programs to inequality.A net-benefit approach

Alvaro Forteza () and Ianina Rossi

No 606, Documentos de Trabajo (working papers) from Department of Economics - dECON

Abstract: The contribution of government transfer programs to inequality is often assessed by analyzing to what extent the benefits paid go to lower income families. Several analysts have found that some key government transfers actually go mostly to middle and high income families and thus contribute to greater inequality. We argue in this paper that the impact of these programs on inequality should be evaluated considering the benefits received net of the taxes paid by households to finance the programs, since higher income households receive higher benefits but they also pay higher taxes. We illustrate this approach by estimating the impact of four government programs on inequality in Uruguay and show that the conclusions are different depending on whether we use gross or net benefits in the estimation.

Keywords: Transfers; inequality; redistribution (search for similar items in EconPapers)
JEL-codes: D31 H55 I38 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2006-06
New Economics Papers: this item is included in nep-lam and nep-pbe
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https://hdl.handle.net/20.500.12008/2048 (application/pdf)

Related works:
Journal Article: The contribution of government transfer programs to inequality. A net-benefit approach (2009)
Journal Article: The Contribution of Government Transfer Programs to Inequality. A Net-Benefit Approach (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ude:wpaper:0606

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