Religion, income inequality, and the size of the government

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

Economic Modelling, 2013, vol. 30, issue C, 225-234

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: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Related works:
Working Paper: Religion, Income Inequality, and the Size of the Government (2010)
Working Paper: Religion, Income Inequality, and the Size of the Government (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:30:y:2013:i:c:p:225-234

DOI: 10.1016/j.econmod.2012.08.017

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