The Distributional Effects of Fiscal Consolidation
June 21, 2013
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Summary
This paper examines the distributional effects of fiscal consolidation. Using episodes of fiscal consolidation for a sample of 17 OECD countries over the period 1978–2009, we find that fiscal consolidation has typically had significant distributional effects by raising inequality, decreasing wage income shares and increasing long-term unemployment. The evidence also suggests that spending-based adjustments have had, on average, larger distributional effects than tax-based adjustments.
Subject: Fiscal consolidation, Fiscal policy, Income, Income distribution, Income inequality, Labor, National accounts, Personal income, Unemployment
Keywords: budget outcome, contractionary effect, distributional effect, distributional effects, effects of fiscal consolidation, Fiscal consolidation, Global, Income, Income distribution, income inequality, income share, long-term unemployment, price boom, Unemployment, WP
Pages:
24
Volume:
2013
DOI:
Issue:
151
Series:
Working Paper No. 2013/151
Stock No:
WPIEA2013151
ISBN:
9781475551945
ISSN:
1018-5941
