The Redistributive Impact of Fiscal Policies in Costa Rica 2010-2018

Ludovico Feoli and Maynor Cabrera

No 119, Commitment to Equity (CEQ) Working Paper Series from Tulane University, Department of Economics

Abstract: Social spending in Costa Rica is sizeable and effectively lowers poverty and inequality. A reliance on indirect taxes on the revenue side reverses a small part of that reduction for Consumable Income. The country devotes a high amount of spending to education and health, so the monetized value of those interventions also has a large positive impact on inequality for Final Income. Comparing results to a previous study shows that Costa Rica’s commitment to progressive social spending has been consistent over the past decade and has helped compensate for a rising trend in inequality. However, a constrained fiscal space and lackluster results in educational and labor market outcomes raise some concerns about the sustainability of these policies.

Keywords: Costa Rica; fiscal policy; fiscal incidence; inequality; poverty; social spending; taxes (search for similar items in EconPapers)
JEL-codes: D31 H22 I38 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2022-04
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Published in Commitment to Equity, April 2022, pages 1-22

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http://repec.tulane.edu/RePEc/ceq/ceq119.pdf First version, 2022 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:tul:ceqwps:119

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