The Distributional Effects of Fiscal Consolidation

WP/13/151

This paper examines the distributional effects of fiscal consolidation. Using episodes of fiscal consolidation for a sample of 17 OECD countries over the period 1978–2009, we find that fiscal consolidation has typically had significant distributional effects by raising inequality, decreasing wage income shares and increasing long-term unemployment. The evidence also suggests that spending-based adjustments have had, on average, larger distributional effects than tax-based adjustments.
Publication date: June 2013
ISBN: 9781475551945
$18.00
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Fiscal consolidation , distributional effects , income inequality

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