Income Inequality in Small States and the Caribbean: Stylized Facts and Determinants

Author/Editor:

Arnold McIntyre ; Pablo Bejar ; Takuji Komatsuzaki ; Mauricio Vargas

Publication Date:

February 12, 2021

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

Rising income inequality has emerged as a major policy issue facing policymakers, but there is a dearth of empirical work on inequality in small states, including the Caribbean. Despite data limitations, the empirical analysis using a sample of small states finds that increased openness and deeper economic integration including financial market openness is associated with lower income inequality, whereas elevated debt levels limit fiscal space and are associated with higher income inequality. An important policy implication is that well targeted social sector spending aimed at improving education and health indicators will support increased redistribution and reduce income inequality.

Series:

Working Paper No. 2021/036

Frequency:

regular

English

Publication Date:

February 12, 2021

ISBN/ISSN:

9781513569475/1018-5941

Stock No:

WPIEA2021036

Format:

Paper

Pages:

22

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