Publication:
Turkish Cypriot Economy, May 2023: Navigating Through Challenging Times - Do Fiscal Policies Help Reduce Income Inequality in the Turkish Cypriot Economy?

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dc.contributor.authorWorld Bank
dc.date.accessioned2025-03-03T20:32:48Z
dc.date.available2025-03-03T20:32:48Z
dc.date.issued2025-03-03
dc.description.abstractThe Special Issue analyzes the impact of taxes and transfers on poverty and inequality in the TCc. It shows that fiscal policy has only a limited impact on reducing inequality, but the system cannot reduce poverty. The Special Issue provides an initial step towards understanding the distributional impact of fiscal policy in the TCc. The Special Issue builds on the first-ever Commitment to Equity (CEQ) model developed for the TCc, which analyzes the impact of taxes and transfers on poverty and inequality. The latest announced estimates from the 2015 Household Budget Survey show that relative poverty is 22.2 percent. Income inequality is also high based on 2015 HBS, with the Gini coefficient estimated at 34 percent, three percentage points above the EU average. The TC fiscal practices contribute to a moderate reduction only in income inequality. Overall, inequality in the TCc drops from 0.445 to 0.361 after fiscal interventions, a reduction of around 0.08 Gini point and among the lowest levels observed. When looking at the impact on poverty, while transfers and direct taxes have a redistributive effect, indirect taxes significantly negatively impact household budgets and lead to an increase in poverty from 21.8 to 25.5 percent. In-kind transfers, such as health and education, have important redistributive effects and lift the impact of fiscal policy in the bottom half of the distribution. When in-kind transfers are excluded from the analysis, all households beginning in the second decile are net payers to the system, as the share of taxes paid exceeds the cash benefits received for all but the poorest 10 percent of the population. When included, instead, all households in the 1st to 5th decile result as net beneficiaries, reporting a favorable net fiscal position. Overall, the results point to potential improvements that could be achieved in the TCc through a more effective system of taxes and transfers to reduce the burden on the poor and address inequality.en
dc.identifierhttp://documents.worldbank.org/curated/en/099021325095524755
dc.identifier.doi10.1596/42898
dc.identifier.doihttps://doi.org/10.1596/42898
dc.identifier.urihttps://hdl.handle.net/10986/42898
dc.languageEnglish
dc.language.isoen_US
dc.publisherWashington, DC: World Bank
dc.rightsCC BY-NC 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by-nc/3.0/igo
dc.subjectECONOMIC GROWTH
dc.subjectNO POVERTY
dc.subjectINEQUALITY
dc.subjectPOVERTY AND INEQUALITY
dc.subjectINCOME INEQUALITY
dc.subjectHOUSEHOLD BUDGET SURVEY (HBS)
dc.titleTurkish Cypriot Economy, May 2023en
dc.title.subtitleNavigating Through Challenging Times - Do Fiscal Policies Help Reduce Income Inequality in the Turkish Cypriot Economy?en
dc.typeReport
dspace.entity.typePublication
okr.date.disclosure2025-03-03
okr.date.doiregistration2025-04-14T11:49:21.555662Z
okr.date.lastmodified2025-02-17T23:05:32Zen
okr.doctypeEconomic & Sector Work::General Economy, Macroeconomics and Growth Study
okr.doctypeEconomic & Sector Work
okr.docurlhttp://documents.worldbank.org/curated/en/099021325095524755
okr.guid099021325095524755
okr.identifier.docmidP180066-79ddf211-6cd3-4ce6-9069-a4cac199394c
okr.identifier.externaldocumentum34456203
okr.identifier.internaldocumentum34456203
okr.identifier.report197388
okr.import.id6755
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttps://documents.worldbank.org/curated/en/099021325095524755/pdf/P180066-79ddf211-6cd3-4ce6-9069-a4cac199394c.pdfen
okr.region.administrativeEurope And Central Asia
okr.region.countryCyprus
okr.sectorFY17 - Trade
okr.sectorFY17 - Industry, Trade and Services
okr.themeFY17 - Investment and Business Climate,FY17 - Trade Policy,FY17 - Economic Growth and Planning,FY17 - Labor Market Policy and Programs,FY17 - Trade,FY17 - Structural Transformation and Economic Diversification,FY17 - Data production, accessibility and use,FY17 - Business Enabling Environment,FY17 - Public Private Partnerships,FY17 - Labor Market Institutions,FY17 - Trade Facilitation,FY17 - Data Development and Capacity Building,FY17 - Regional Integration
okr.themeFY17 - Economic Policy,FY17 - Human Development and Gender,FY17 - Private Sector Development,FY17 - Public Sector Management
okr.topicMacroeconomics and Economic Growth::Income
okr.topicMacroeconomics and Economic Growth::Taxation & Subsidies
okr.topicPoverty Reduction::Inequality
okr.unitEFI-ECA-MTI-MacroFiscal-2 (EECM2)
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