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Fiscal Incidence and Poverty Reduction: Evidence from Tunisia

Author

Listed:
  • Nizar Jouini

    () (Doha Institute for High Graduates)

  • Nora Lustig

    () (Department of Economics, Tulane University)

  • Ahmed Moummi

    () (African Development Bank)

  • Abebe Shimeles

    () (African Development Bank)

Abstract

Applying standard fiscal incidence analysis to the National Survey of Consumption and Household Living Standards for 2010, this paper estimates the impact of Tunisia's tax and transfer system on inequality and poverty and assesses who benefits from public spending on education and health. Our results show that Tunisia fiscal policy reduces inequality and extreme poverty through redistributive public spending. However, the headcount ratio with the national poverty increases implying that a large number of the poor pay more in taxes than what they receive in cash transfers and subsidies. This is due to a relatively high burden of personal income taxes and social security contributions for low-income households.

Suggested Citation

  • Nizar Jouini & Nora Lustig & Ahmed Moummi & Abebe Shimeles, 2017. "Fiscal Incidence and Poverty Reduction: Evidence from Tunisia," Working Papers 1710, Tulane University, Department of Economics.
  • Handle: RePEc:tul:wpaper:1710
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    File URL: http://econ.tulane.edu/RePEc/pdf/tul1710.pdf
    File Function: First Version, August 2017
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    References listed on IDEAS

    as
    1. Inchauste, Gabriela & Lustig, Nora & Maboshe, Mashekwa & Purfield, Catriona & Woolard, Ingrid, 2015. "The distributional impact of fiscal policy in South Africa," Policy Research Working Paper Series 7194, The World Bank.
    2. Gabriela Inchauste & Nora Lustig & Mashekwa Maboshe & Catriona Purfield & Ingrid Woolard, 2015. "Distributional Impact of Fiscal Policy in South Africa," Commitment to Equity (CEQ) Working Paper Series 1329, Tulane University, Department of Economics.
    3. 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.
    4. Gabriela Inchauste & Nora Lustig & Mashekwa Maboshe & Catriona Purfield & Ingrid Woolard, 2015. "Distributional Impact of Fiscal Policy in South Africa," Commitment to Equity (CEQ) Working Paper Series 29, Tulane University, Department of Economics.
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    Cited by:

    1. Jon Jellema & Nora Lustig & Astrid Haas & Sebastian Wolf, 2016. "The Impact of Taxes, Transfers, and Subsidies on Inequality and Poverty in Uganda," Commitment to Equity (CEQ) Working Paper Series 53, Tulane University, Department of Economics.
    2. Nora Lustig, 2016. "Fiscal policy, inequality, and the poor in the developing world," WIDER Working Paper Series 164, World Institute for Development Economic Research (UNU-WIDER).
    3. Urban, Ivica, 2017. "Measuring income redistribution: beyond the proportionality standard," EUROMOD Working Papers EM1/17, EUROMOD at the Institute for Social and Economic Research.
    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," Working Papers 1701, Tulane University, Department of Economics, revised Aug 2017.
    6. Nora Lustig, 2017. "The Sustainable Development Goals, Domestic Resource Mobilization and the Poor," Working Papers 1713, Tulane University, Department of Economics.

    More about this item

    Keywords

    Benefit incidence; inequality; poverty; Tunisia;

    JEL classification:

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

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