Effects of Government Policies on Income Distribution and Welfare

Ximing Wu (), Jeffrey Perloff and Amos Golan

Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series from Department of Agricultural & Resource Economics, UC Berkeley

Abstract: A variety of parametric and semiparametric models produce qualitatively similar estimates of government policies’ effects on income distribution and welfare (as measured by the Gini, standard deviation of logarithms, relative mean deviation, coefficient of variation, and various Atkinson indexes). Taxes and the Earned Income Tax Credit are an effective way to redistribute income to the poor and raise welfare. The minimum wage lowers welfare. Social insurance programs have little effect except for Supplemental Security Income, which raises welfare. Transfer programs (AFDC/TANF and food stamps) either have no statistically significant effect or lower welfare.

Date: 2002-02-01
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Related works:
Working Paper: Effects of Government Policies on Income Distribution and Welfare (2002)
Working Paper: Effects of Government Policies on Income Distribution and Welfare (2002)
Working Paper: Effects of Government Policies on Income Distribution and Welfare (2002)
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