Government consumption in the DINA framework: allocation methods and consequences for post-tax income inequality

Lukas Riedel and Holger Stichnoth

International Tax and Public Finance, 2024, vol. 31, issue 3, No 4, 736-779

Abstract: Abstract About half of government expenditure in the United States takes the form of government consumption (e.g., education, defense, infrastructure). In many studies of post-tax inequality based on the Dina framework (including the influential study by Piketty et al. (Q J Econ 133(2):553–609, 2018), government consumption is allocated either proportionally to post-tax disposable income or on a per-capita basis, and the level of inequality is fairly sensitive to this choice. This paper provides direct evidence on how public education spending (a substantial part of government consumption) is actually distributed. An allocation proportional to post-tax disposable income is clearly rejected, while a lump-sum allocation is found to provide a good approximation.

Keywords: Inequality; Redistribution; Education; In-kind transfers (search for similar items in EconPapers)
JEL-codes: D31 H41 H52 I24 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10797-024-09832-1 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:itaxpf:v:31:y:2024:i:3:d:10.1007_s10797-024-09832-1

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/10797/PS2

DOI: 10.1007/s10797-024-09832-1

Access Statistics for this article

International Tax and Public Finance is currently edited by Ronald B. Davies and Kimberly Scharf

More articles in International Tax and Public Finance from Springer, International Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().