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Social Spending, Taxes and Income Redistribution in Paraguay

Author

Listed:
  • Sean Higgins

    (Stone Center for Latin American Studies, Department of Economics, Tulane University, Commitment to Equity Institute (CEQI).)

  • Nora Lustig

    (Department of Economics, Tulane University)

  • Julio Ramirez

    (CADEP)

  • William Swanson

    (UC Davis)

Abstract

How much redistribution does Paraguay accomplish through social spending and taxes? How progressive are revenue collection and social spending? Using a standard fiscal incidence analysis, we quantify the reduction in inequality and poverty in Paraguay across income concepts, and contextualize these results by placing Paraguay in comparative perspective with other Latin American countries. Paraguay achieves a relatively small reduction in inequality, even when in-kind education and health benefits are taken into account. Direct taxes are progressive, indirect taxes are regressive, and total taxes are regressive. Social spending is progressive in relative terms, but less so than in any of the other countries analyzed.

Suggested Citation

  • Sean Higgins & Nora Lustig & Julio Ramirez & William Swanson, 2013. "Social Spending, Taxes and Income Redistribution in Paraguay," Commitment to Equity (CEQ) Working Paper Series 11, Tulane University, Department of Economics.
    • Handle: RePEc:tul:ceqwps:11
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    File URL: http://repec.tulane.edu/RePEc/ceq/ceq11.pdf
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    References listed on IDEAS

    as
    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. Nora Lustig & George Gray-Molina & Sean Higgins & Miguel Jaramillo & Wilson Jiménez & Veronica Paz & Claudiney Pereira & Carola Pessino & John Scott & Ernesto Yañez, 2012. "The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico and Peru: A Synthesis of Results," Working Papers 264, ECINEQ, Society for the Study of Economic Inequality.
    3. Nora Lustig & Carola Pessino, 2014. "Social Spending and Income Redistribution in Argentina during the 2000s: The Increasing Role of Noncontributory Pensions," Public Finance Review, , vol. 42(3), pages 304-325, May.
    4. Pedro H. G. F. de Souza & Rafael G. Osorio & Sergei S. O. Soares, 2011. "Uma Metodologia Para Simular o Programa Bolsa Família," Discussion Papers 1654, Instituto de Pesquisa Econômica Aplicada - IPEA.
    5. Miguel Jaramillo, 2014. "The Incidence of Social Spending and Taxes in Peru," Public Finance Review, , vol. 42(3), pages 391-412, May.
    6. Nora Lustig & Carola Pessino, 2012. "Social Spending and Income Redistribution in Argentina During the 2000s: the Rising Role of Noncontributory Pensions," Working Papers 1221, Tulane University, Department of Economics.
    7. Sean Higgins & Claudiney Pereira, 2014. "The Effects of Brazil’s Taxation and Social Spending on the Distribution of Household Income," Public Finance Review, , vol. 42(3), pages 346-367, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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