The Impact of Fiscal Consolidation on Inequality:The Case of V4 Countries

Peter Mandzak ()

No 15, Department of Economic Policy Working Paper Series from Department of Economic Policy, Faculty of National Economy, University of Economics in Bratislava

Abstract: The aim of this paper is to provide the first empirical evidence ofthe impact of fiscal consolidation on income inequality in V4 countries.Although the literature on income inequality and its various determinantsis wide, there are still some areas in this topic, where the research islacking.Different specifications of models imply that fiscal consolidation in V4countries leads to an increase in income inequality. Results of our analy-sis suggest, that fiscal consolidation larger than 2 % of GDP has negativeimpact on equality in V4 countries, while this effect is stronger than theeffects of our control variables – GDP growth, change in total factor pro-ductivity (TFP), change in trade openness, mean years of schooling andunemployment. Change in structural balance seems to have no effect onincome inequality in the given countries. However, structural balance havesurprisingly negative effect. We believe it is due to the structure of ourdata set, which contains only three observations with positive structuralbalance.

Keywords: income inequality; fiscal consolidation; V4 countries (search for similar items in EconPapers)
JEL-codes: C23 D63 H30 I38 (search for similar items in EconPapers)
Pages: 15 pages
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://nhf.euba.sk/www_write/files/katedry/khp/working-papers/dep_wp015.pdf (application/pdf)

Related works:
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:brt:depwps:015

Access Statistics for this paper

More papers in Department of Economic Policy Working Paper Series from Department of Economic Policy, Faculty of National Economy, University of Economics in Bratislava Contact information at EDIRC.
Bibliographic data for series maintained by Martin Labaj ().