Advanced Search
MyIDEAS: Login to save this paper or follow this series

Income inequality, tax base and sovereign spreads

Contents:

Author Info

  • Aizenman, Joshua
  • Jinjarak, Yothin

Abstract

This note investigates the impact of greater income inequality on the tax base, on the defactofiscal space, and the sovereign spreads. Using data from 50 countries in 2005 and in 2010,we find that higher income inequality is associated with a lower tax base, lower de-facto fiscalspace, and higher sovereign spreads. The economic magnitude of these effects is rather large: aone standard deviation increase of inequality is associated with a lower tax base of 28 % GDP,and with a higher sovereign spread of 240 basis points in 2005

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.escholarship.org/uc/item/76j471c7.pdf;origin=repeccitec
Download Restriction: no

Bibliographic Info

Paper provided by Department of Economics, UC Santa Cruz in its series Santa Cruz Department of Economics, Working Paper Series with number qt76j471c7.

as in new window
Length:
Date of creation: 12 Oct 2011
Date of revision:
Handle: RePEc:cdl:ucscec:qt76j471c7

Contact details of provider:
Postal: Santa Cruz, CA 95064
Phone: (831) 459-2743
Fax: (831) 459-5077
Email:
Web page: http://www.escholarship.org/repec/ucscecon/
More information through EDIRC

Related research

Keywords: Social and Behavioral Sciences; Income inequality; tax-base; fiscal space; sovereign spreads;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Joshua Aizenman & Yothin Jinjarak, 2011. "The Fiscal Stimulus of 2009-2010: Trade Openness, Fiscal Space, and Exchange Rate Adjustment," NBER Chapters, National Bureau of Economic Research, Inc, in: NBER International Seminar on Macroeconomics 2011, pages 301-342 National Bureau of Economic Research, Inc.
  2. Michael G. Arghyrou & Alexandros Kontonikas, 2011. "The EMU sovereign-debt crisis: Fundamentals, expectations and contagion," European Economy - Economic Papers, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission 436, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  3. Alberto Alesina & Allan Drazen, 1989. "Why are Stabilizations Delayed?," NBER Working Papers, National Bureau of Economic Research, Inc 3053, National Bureau of Economic Research, Inc.
  4. Aizenman, Joshua & Hutchison, Michael & Jinjarak, Yothin, 2011. "What is the Risk of European Sovereign Debt Defaults? Fiscal Space, CDS Spreads and Market Pricing of Risk," Santa Cruz Department of Economics, Working Paper Series, Department of Economics, UC Santa Cruz qt2914v9fh, Department of Economics, UC Santa Cruz.
  5. Aizenman, Joshua & Jinjarak, Yothin, 2011. "The Fiscal Stimulus of 2009-10: Trade Openness, Fiscal Space and Exchange Rate Adjustment," Santa Cruz Department of Economics, Working Paper Series, Department of Economics, UC Santa Cruz qt1vm5d1p4, Department of Economics, UC Santa Cruz.
  6. Rosser, J. Jr. & Rosser, Marina V. & Ahmed, Ehsan, 2000. "Income Inequality and the Informal Economy in Transition Economies," Journal of Comparative Economics, Elsevier, Elsevier, vol. 28(1), pages 156-171, March.
  7. Bruno S. Frey & Benno Torgler, 2006. "Tax Morale and Conditional Cooperation," CREMA Working Paper Series, Center for Research in Economics, Management and the Arts (CREMA) 2006-11, Center for Research in Economics, Management and the Arts (CREMA).
  8. Luiz de Mello & Erwin R. Tiongson, 2006. "Income Inequality and Redistributive Government Spending," Public Finance Review, , , vol. 34(3), pages 282-305, May.
  9. Jonathan Haughton & Shahidur R. Khandker, 2009. "Handbook on Poverty and Inequality," World Bank Publications, The World Bank, The World Bank, number 11985, February.
  10. Atish R. Ghosh & Jun I. Kim & Enrique G. Mendoza & Jonathan D. Ostry & Mahvash S. Qureshi, 2011. "Fiscal Fatigue, Fiscal Space and Debt Sustainability in Advanced Economies," NBER Working Papers, National Bureau of Economic Research, Inc 16782, National Bureau of Economic Research, Inc.
  11. Reardon, Thomas & Lovell, Richard D. & Peter, Rufina & Mbithi, Stephen & Glover, John & McKinna, David & Fels, Allan & Reid, Margaret, 2011. "Q and A," Conference Proceedings 2011, Crawford Fund 125336, Crawford Fund.
  12. Roland Benabou, 2000. "Unequal Societies: Income Distribution and the Social Contract," American Economic Review, American Economic Association, American Economic Association, vol. 90(1), pages 96-129, March.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Santo Milasi, 2012. "Top Income Shares and Budget Deficits," CEIS Research Paper, Tor Vergata University, CEIS 249, Tor Vergata University, CEIS, revised 08 Aug 2013.
  2. Bethencourt, Carlos & Kunze, Lars, 2013. "The political economics of redistribution, inequality and tax avoidance," MPRA Paper, University Library of Munich, Germany 51127, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cdl:ucscec:qt76j471c7. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.