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Social Spending, Taxes, and Income Redistribution in Uruguay

Author

Listed:
  • Marisa Bucheli
  • Nora Lustig
  • Máximo Rossi
  • Florencia Amábile

Abstract

How much redistribution does Uruguay accomplish through social spending and taxes? How progressive are revenue collection and social spending? What could be done to further increase redistribution and improve redistributional effectiveness? A standard fiscal incidence analysis shows that Uruguay achieves a nontrivial reduction in inequality and poverty when all taxes and transfers are combined. Direct taxes are progressive and indirect taxes are practically neutral. Social spending on direct transfers, contributory pensions, education, and health is quite progressive in absolute terms except for tertiary education, which is almost neutral in relative terms. Specific suggestions for improving the effectiveness are suggested.

Suggested Citation

  • Marisa Bucheli & Nora Lustig & Máximo Rossi & Florencia Amábile, 2014. "Social Spending, Taxes, and Income Redistribution in Uruguay," Public Finance Review, , vol. 42(3), pages 413-433, May.
  • Handle: RePEc:sae:pubfin:v:42:y:2014:i:3:p:413-433
    DOI: 10.1177/1091142113493493
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    References listed on IDEAS

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    1. Marisa Bucheli & Nora Lustig & Máximo Rossi & Florencia Amábile, 2014. "Social Spending, Taxes, and Income Redistribution in Uruguay," Public Finance Review, , vol. 42(3), pages 413-433, May.
    2. Lustig, Nora & Gray Molina, George & Higgins, Sean & Jaramillo, Miguel & Jiménez, Wilson & Paz, Verónica & Pereira, Claudiney & Pessino, Carola & Scott, John & Yáñez, Ernesto, 2012. "The impact of taxes and social spending on inequality and poverty in Argentina, Bolivia, Brazil, Mexico and Peru: a synthesis of results," Research Department working papers 234, CAF Development Bank Of Latinamerica.
    3. Verónica Amarante & Marisa Bucheli & Cecilia Olivieri & Ivone Perazzo, 2011. "Distributive impacts of alternative tax structures. The case of Uruguay," Documentos de Trabajo (working papers) 0911, Department of Economics - dECON.
    4. Nora Lustig & Carola Pessino & John Scott, 2014. "The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, Peru, and Uruguay: Introduction to the Special Issue," Public Finance Review, , vol. 42(3), pages 287-303, May.
    5. Nora Lustig & Carola Pessino & John Scott, 2013. "The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, Peru and Uruguay: An Overview," Working Papers 1313, Tulane University, Department of Economics.
    6. Bucheli, Marisa & Casacuberta, Carlos, 2000. "Asistencia escolar y participación en el mercado de trabajo de los adolecentes en Uruguay," El Trimestre Económico, Fondo de Cultura Económica, vol. 0(267), pages 395-420, julio-sep.
    7. Fernando Filgueira & Alvaro Fuentes & Carlos Filgueira, 2001. "Critical Choices at a Critical Age: Youth Emancipation Paths and School Attainment in Latin America," Research Department Publications 3129, Inter-American Development Bank, Research Department.
    8. John Scott, 2014. "Redistributive Impact and Efficiency of Mexico’s Fiscal System," Public Finance Review, , vol. 42(3), pages 368-390, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    poverty; inequality; Uruguay; social spending; taxes;
    All these keywords.

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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