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Equality Enhancing Benefit Cut - Possible, but Unlikely

Author

Listed:
  • Mauri Kotamäki

    (Finalnd Chamber of Commerce)

Abstract

This paper considers whether a replacement rate cut can be income equality enhancing and with what conditions. The logical answer to the question is yes, if the propensity of moving from low income state to high income state is high enough. The main contribution of this paper is to derive an analytical expression of income equality improving elasticity. It specifies the limit, after which replacement rate cut is equality enhancing measured by Gini coefficient.

Suggested Citation

  • Mauri Kotamäki, 2020. "Equality Enhancing Benefit Cut - Possible, but Unlikely," Discussion Papers 134, Aboa Centre for Economics.
  • Handle: RePEc:tkk:dpaper:dp134
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    File URL: http://ace-economics.fi/kuvat/dp134.pdf
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    References listed on IDEAS

    as
    1. Peter Levell & Barra Roantree & Jonathan Shaw, 2015. "Redistribution from a lifetime perspective," IFS Working Papers W15/27, Institute for Fiscal Studies.
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    More about this item

    Keywords

    Income Equality; Income Distribution; Unemployment Benefits; Gini coefficient;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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