On the Middle 70%. The Impact of Fiscal Policy on the Emerging Middle Class in Latin America usting Commitment to Equity

Christian Daude, Nora Lustig, Angel Melguizo and Jose Perea

No 72, Commitment to Equity (CEQ) Working Paper Series from Tulane University, Department of Economics

Abstract: This paper analyzes the effects of indirect and direct taxes, as well as monetary and in-kind transfers on the income distribution in nine Latin American countries applying the CEQ methodology and using household and expenditure microdata around 2010. In particular, we focus on the effect of fiscal policies on two groups of the emerging middle class: the vulnerable and the middle class. We find that while the vulnerable tend to be net receivers in fiscal terms, especially when including in-kind transfers, the middle class seems to be mainly a net payer. This might be aggravated by the perception of a relatively low quality of in-kind transfers, notably in education and health-care services. We provide some evidence based on subjective surveys pointing in this direction.

Keywords: middle class; tax-benefit analysis; fiscal incidence; fiscal mobility (search for similar items in EconPapers)
JEL-codes: D31 H22 H50 I30 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2017-08
New Economics Papers: this item is included in nep-lam and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://repec.tulane.edu/RePEc/ceq/ceq72.pdf First version, 2017 (application/pdf)

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Working Paper: On the middle 70%. The impact of fiscal policy on the emerging middle class in Latin America using Commitment to Equity (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:tul:ceqwps:72

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