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Fiscal Policy, Inequality, and the Ethnic Divide in Guatemala - Working Paper 397

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  • Maynor Cabrera, Nora Lustig, and Hilcías E. Morán

Abstract

Guatemala is one of the most unequal countries in Latin America and has the highest incidence of poverty. The indigenous population is more than twice as likely to be poor than the nonindigenous group. Fiscal incidence analysis based on the 2009-2010 National Survey of Family Income and Expenditures shows that taxes and transfers do almost nothing to reduce inequality and poverty overall or along ethnic and rural-urban lines. Persistently low tax revenues are the main limiting factor. Tax revenues are not only low but also regressive. Consumption taxes are regressive enough to offset the benefits of cash transfers: poverty after taxes and cash transfers is higher than market income poverty.

Suggested Citation

  • Maynor Cabrera, Nora Lustig, and Hilcías E. Morán, 2015. "Fiscal Policy, Inequality, and the Ethnic Divide in Guatemala - Working Paper 397," Working Papers 397, Center for Global Development.
  • Handle: RePEc:cgd:wpaper:397
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    File URL: http://www.cgdev.org/publication/fiscal-policy-inequality-and-ethnic-divide-guatemala-working-paper-397
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    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. Carla Canelas & Rachel M. Gisselquist, 2017. "Human capital, labour market outcomes, and horizontal inequality in Guatemala," WIDER Working Paper Series 091, World Institute for Development Economic Research (UNU-WIDER).
    2. Carla Canelas & Rachel Gisselquist, 2017. "Human Capital, Labour Market Outcomes and Horizontal Inequality in Guatemala," Documents de travail du Centre d'Economie de la Sorbonne 17045, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    3. Nora Lustig, 2018. "Measuring the Distribution of Household Income, Consumption and Wealth: State of Play and Measurement Challenges," Working Papers 1801, Tulane University, Department of Economics.
    4. Nora Lustig, 2016. "Fiscal policy, inequality and the poor in the developing world," Working Papers 418, ECINEQ, Society for the Study of Economic Inequality.
    5. Nora Lustig, 2017. "Fiscal Policy, Income Redistribution and Poverty Reduction in Low and Middle Income Countries," Commitment to Equity (CEQ) Working Paper Series 1354, Tulane University, Department of Economics.
    6. Nora Lustig, 2017. "Fiscal Policy, Income Redistribution and Poverty Reduction in Low and Middle Income Countries," Commitment to Equity (CEQ) Working Paper Series 54, Tulane University, Department of Economics.
    7. repec:ecr:col070:42655 is not listed on IDEAS
    8. repec:kap:jecinq:v:16:y:2018:i:3:d:10.1007_s10888-017-9373-7 is not listed on IDEAS
    9. Nora Lustig, 2016. "Fiscal policy, inequality, and the poor in the developing world," WIDER Working Paper Series 164a, World Institute for Development Economic Research (UNU-WIDER).
    10. Nora Lustig, 2016. "Fiscal policy, inequality, and the poor in the developing world," WIDER Working Paper Series 164b (Revised version May, World Institute for Development Economic Research (UNU-WIDER).
    11. Carla Canelas & Rachel Gisselquist, 2017. "Human Capital, Labor Market Outcomes and Horizontal Inequality in Guatemala," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01658795, HAL.

    More about this item

    Keywords

    inequality; poverty; ethnic divide; fiscal incidence; taxes; social spending; Guatemala;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

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