Income instability and fiscal progression

B. Cecilia Garcia-Medina and Jean-Francois Wen

Canadian Journal of Economics, 2018, vol. 51, issue 2, 419-451

Abstract: We construct the ratio of the post-fisc to the pre-fisc variance of the transitory component of family incomes in Canada from 1993 to 2008. The ratio measures how much the tax and transfer system attenuates market income instability. It is shown that the ratio of variances is equivalent theoretically to the concept of residual income progression (squared). The fiscal system became less stabilizing beginning in the late 1990s, especially for families headed by main earners with less than high school education. The trend is attributable to personal income tax reforms and reductions in transfers for lower income families.

JEL-codes: H22 (search for similar items in EconPapers)
Date: 2018
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Related works:
Working Paper: Income Instability and Fiscal Progression (2016)
Working Paper: Income Instability and Fiscal Progression (2015)
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