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The impact of redistributive policies on inequality in OECD countries

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  • Philipp Doerrenberg
  • Andreas Peichl

Abstract

Due to behavioural effects triggered by redistributional interventions, it is still an open question whether government policies are able to effectively reduce income inequality. We contribute to this research question by using different country-level data sources to study inequality trends in OECD countries since 1980. We first investigate the development of inequality over time before analysing the question of whether governments can effectively reduce inequality. Different identification strategies, using fixed effects and instrumental variables models, provide some evidence that governments are capable of reducing income inequality despite countervailing behavioural responses. The effect is stronger for social expenditure policies than for progressive taxation.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 46 (2014)
Issue (Month): 17 (June)
Pages: 2066-2086

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Handle: RePEc:taf:applec:v:46:y:2014:i:17:p:2066-2086

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Inequality in OECD Countries
    by maximorossi in NEP-LTV blog on 2012-05-11 16:54:58
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. European Commission, 2013. "Tax reforms in EU Member States - Tax policy challenges for economic growth and fiscal sustainability – 2013 Report," Taxation Papers 38, Directorate General Taxation and Customs Union, European Commission.
  2. Andreas Kuhn, 2012. "Redistributive preferences, redistribution, and inequality: Evidence from a panel of OECD countries," ECON - Working Papers 084, Department of Economics - University of Zurich.
  3. K. Sommerfeld, 2013. "Higher and higher? Performance pay and wage inequality in Germany," Applied Economics, Taylor & Francis Journals, vol. 45(30), pages 4236-4247, October.
  4. Thibault Darcillon, 2012. "Do Interactions between Finance and Labor Market Institutions Affect Wage Distribution ?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00768908, HAL.
  5. Thibault Darcillon, 2012. "Do Interactions between Finance and Labor Market Institutions Affect Wage Distribution?," Documents de travail du Centre d'Economie de la Sorbonne 12089, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  6. Unal Tongur & Adem Yavuz Elveren, 2013. "Deunionization and Pay Inequality in OECD Countries: A Panel Granger Causality Approach," ERC Working Papers 1306, ERC - Economic Research Center, Middle East Technical University, revised May 2013.
  7. Andreas Kuhn, 2012. "Redistributive Preferences, Redistribution and Inequality: Evidence from a Panel of OECD Countries," NRN working papers 2012-08, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  8. Kuhn, Andreas, 2012. "Redistributive Preferences, Redistribution, and Inequality: Evidence from a Panel of OECD Countries," IZA Discussion Papers 6721, Institute for the Study of Labor (IZA).

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