Fiscal Adjustment and Income Inequality: Sub-national Evidence from Brazil

João Pedro Azevedo (), Antonio David, Fabiano Rodrigues Bastos and Emilio Pineda

No 2014/085, IMF Working Papers from International Monetary Fund

Abstract: We combine state-level fiscal data with household survey data to assess the links between sub-national fiscal policy and income inequality in Brazil over the period 1995-2011. The results indicate that a tighter fiscal stance at the sub-national level is not associated with a deterioration in inequality measures. This finding contrasts with the conclusions of several papers in the burgeoning literature on the effects of fiscal consolidation on inequality using national data for OECD economies. In addition, we find that a tighter stance is typically positively associated with a measure of “shared prosperity”. Hence, our results caution against extrapolating policy implications of the literature focusing on advanced economies to other settings.

Keywords: WP; State GDP; revenue transfer; investment expenditure; average earnings; inequality measure; state characteristic; Fiscal Adjustment; Fiscal Policy; Income Inequality; Brazil; expenditure elasticity; time trend; Fiscal stance; Fiscal consolidation; Western Europe (search for similar items in EconPapers)
Pages: 31
Date: 2014-05-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=41553 (application/pdf)

Related works:
Working Paper: Fiscal adjustment and income inequality: sub-national evidence from Brazil (2014)
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:imf:imfwpa:2014/085

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().