Inequality, redistribution and crisis: A comparative analysis of 5 countries
Year of Publication:
LIS Working Paper Series No. 795
Luxembourg Income Study (LIS), Luxembourg
This paper analyses government instruments in terms of reducing market inequality. Government redistribution, realized through public spending and taxation, could be considered as a key element in order to ensure a more equal distribution of income between households. The first part of the paper focuses on the study, from a more theoretical perspective, of the role of the different types of tools that can be used by governments: social transfers (pensions, family benefits and unemployment benefits), taxation, conditional cash transfers (more common in developing countries), instruments of fiscal consolidation and the expenditure modifications that a government can carry out during a period of crisis. The second part of the paper entails a series of empirical analyses, based on LIS data, including some in-depth analyses with a specific focus on five countries that experienced a period of crisis: United States, Germany, Norway, Sweden and Brazil. For each country the analysis focuses on the effect of the transfers, taxation and public pensions on inequality.