The effects of taxation on income inequality in sub-Saharan Africa

Idrissa Ouedraogo (), Issa Dianda, Pegdwende Patrik Ouedraogo, Rodrigue Tiraogo Ouedraogo and Bassirou Konfe

No wp-2022-129, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper investigates the effects of taxation on income inequality in an unbalanced panel of 45 countries in sub-Saharan Africa over the period 1980-2018. We use instrumental-variable two-stage least squares and instrumental-variable quantile regression estimates. We find that taxation widens income inequality. We also show that the increasing effects of taxation on income inequality are higher in the most unequal countries than in the least unequal countries. Furthermore, we highlight an inverse U-shaped relationship between indirect taxes and income inequality.

Keywords: Income inequality; Taxation; Regression analysis; Sub-Saharan Africa (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-pub
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