Equality Enhancing Benefit Cut - Possible, but Unlikely

Mauri Kotamäki
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Mauri Kotamäki: Finalnd Chamber of Commerce
Authors registered in the RePEc Author Service: Mauri Kotamäki

No 134, Discussion Papers from Aboa Centre for Economics

Abstract: This paper considers whether a replacement rate cut can be income equality enhancing and with what conditions. The logical answer to the question is yes, if the propensity of moving from low income state to high income state is high enough. The main contribution of this paper is to derive an analytical expression of income equality improving elasticity. It specifies the limit, after which replacement rate cut is equality enhancing measured by Gini coefficient.

Keywords: Income Equality; Income Distribution; Unemployment Benefits; Gini coefficient (search for similar items in EconPapers)
JEL-codes: D31 J20 J65 (search for similar items in EconPapers)
Pages: 14
Date: 2020-07
New Economics Papers: this item is included in nep-pbe
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