Remittances, Lorenz Dominance in the Distribution of Income and Redistribution
Raul Ponce Rodriguez () and
Ikuho Kochi ()
Review of Economics and Institutions, 2017, vol. 8, issue 1
We analyze how changes in the distribution of income, characterized by the comparison of Lorenz curves, affect public redistribution for an economy with international interfamily transfers (remittances). Our analysis suggests that a fall in the inequality of income might increase or reduce the governmentâ€™s ability to collect tax revenue and its electoral costs from inefficient taxation which in turn affect public redistribution. The main contribution of this paper is to characterize conditions in which a shift towards a dominant Lorenz curve can lead to an increase or fall in public redistribution. We also find that the composition of a change in the distribution of income, promoted by a change in the distribution of labor income or remittances, leads to different effects on the size of public redistribution.
Keywords: remittances; redistribution; political competition; Lorenz curves (search for similar items in EconPapers)
JEL-codes: F24 H23 D63 D72 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:pia:review:v:8:y:2017:i:1:n:1
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