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The effects of taxation on income inequality in sub-Saharan Africa

Author

Listed:
  • Idrissa Ouedraogo
  • Issa Dianda
  • Pegdwende Patrik Ouedraogo
  • Rodrigue Tiraogo Ouedraogo
  • Bassirou Konfe

Abstract

This paper investigates the effects of taxation on income inequality in an unbalanced panel of 45 countries in sub-Saharan Africa over the period 1980-2018. We use instrumental-variable two-stage least squares and instrumental-variable quantile regression estimates. We find that taxation widens income inequality. We also show that the increasing effects of taxation on income inequality are higher in the most unequal countries than in the least unequal countries. Furthermore, we highlight an inverse U-shaped relationship between indirect taxes and income inequality.

Suggested Citation

  • Idrissa Ouedraogo & Issa Dianda & Pegdwende Patrik Ouedraogo & Rodrigue Tiraogo Ouedraogo & Bassirou Konfe, 2022. "The effects of taxation on income inequality in sub-Saharan Africa," WIDER Working Paper Series wp-2022-129, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2022-129
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    References listed on IDEAS

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