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Bringing all Chileans on board

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  • Eduardo Olaberría

    (OECD)

Abstract

The Chilean economy has had an extraordinary performance over the last decades with strong growth and declining poverty rates. However, the economy is now slowing at a time when inequality remains very high, making future social progress challenging. This paper discusses how to achieve greater social inclusiveness against the background of weaker medium-term growth. First, it argues that Chile needs to increase income redistribution through its tax and transfer system towards levels prevailing in other OECD increases. Although existing social transfers are effective in combatting poverty, their size remains small and many households at the bottom of the ladder are not reached by them. Second, the paper argues that labour earnings should be less disparate, as they explain around 70% of income inequality. This should be done by updating labour legislation, but also by empowering low-skill workers and enabling them to increase their productivity, through the acquisition of adequate skills. Finally, focus should be placed on closing wide gender gaps.This working paper relates to the 2015 OECD Economic Survey of Chile (http://www.oecd.org/eco/surveys/economic-survey-chile.htm). Amener tous les Chiliens à bord L'économie chilienne a eu une performance extraordinaire au cours des dernières décennies, avec une forte croissance et la baisse des taux de pauvreté. Cependant, l'économie se ralentit à un moment où l'inégalité reste très élevé, ce qui rend l'avenir du progrès social difficile. Ce chapitre traite de la façon d'atteindre une plus grande inclusion sociale dans le contexte de ralentissement de la croissance à moyen terme. Premièrement, elle soutient que le Chili a besoin d'augmenter la redistribution des revenus par le biais de son système fiscal et de transferts vers des niveaux qui prévalent dans d'autres augmentations de l'OCDE. Bien que les transferts sociaux existants soient efficaces dans la lutte contre la pauvreté, leur taille reste faible et de nombreux ménages au bas de l'échelle ne sont pas atteints par eux. Deuxièmement, le chapitre fait valoir que les revenus du travail devraient être moins disparate, car ils expliquent environ 70% de l'inégalité des revenus. Cela devrait être fait en mettant à jour la législation du travail, mais aussi en donnant aux travailleurs peu qualifiés et en leur permettant d'accroître leur productivité, grâce à l'acquisition de compétences adéquates. Enfin, l'accent devrait être mis sur la réduction des écarts entre les sexes larges. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de Chili 2015 (www.oecd.org/fr/eco/etudes/etude-economique-chili.htm).

Suggested Citation

  • Eduardo Olaberría, 2016. "Bringing all Chileans on board," OECD Economics Department Working Papers 1289, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:1289-en
    DOI: 10.1787/5jm0xdx0b06g-en
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    More about this item

    Keywords

    gender equity; impôt; income distribution; income tax; mobilité sociale; prestations sociales; répartition des revenus; social benefits; social mobility; équité entre les sexes;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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