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Are equalization payments making Canadians better off? A two-dimensional dominance answer

Listed author(s):
  • Benoît Tarroux

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - CNRS - Centre National de la Recherche Scientifique)

This article provides a robust normative appraisal of the Canadian equalization transfers system. The two-dimensional dominance criteria introduced by Atkinson and Bourguignon (RES, 1982) are used to compare the distributions of private and public goods before and after equalization payments. Because the distribution before equalization is not observable, it is simulated on the basis of various scenarios that specify both its financing by the federal government and its utilization by provincial governments. The main result of the paper is that, for most scenarios, equalization transfers have an ambiguous normative impact on the distribution of well-being among Canadians and that, for some scenarios, equalization transfers actually worsen this distribution of well-being.

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Paper provided by HAL in its series Post-Print with number halshs-00560053.

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Length:
Date of creation: 2012
Publication status: Published in The Journal of Economic Inequality, 2012, 10, pp.19-44. 〈10.1007/s10888-010-9152-1〉
Handle: RePEc:hal:journl:halshs-00560053
DOI: 10.1007/s10888-010-9152-1
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00560053
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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