Publication: Globalization and the Role of Public Transfers in Redistributing Income in Latin America and the Caribbean
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Date
2010
ISSN
0305750X
Published
2010
Author(s)
Shapiro, Joseph
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Abstract
This paper focuses on measuring the extent to which publicly subsidized transfers in Latin America and the Caribbean redistribute income. The redistributive power of 56 transfers in eight countries is measured by their simulated impacts on poverty and inequality, and by their distributional characteristic. Our findings suggest that public transfers can be effective instruments to redistribute income to the poor. Despite coverage and distributional patterns that favor the poor, small unit subsidies limit the redistributive, poverty and inequality impacts of even the most targeted social assistance programs.
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Publication Conditional Cash Transfers, Adult Work Incentives, and Poverty(2008)Conditional cash transfer (CCT) programmes aim to alleviate poverty through monetary and in-kind benefits, as well as reduce future incidence of poverty by encouraging investments in education, health and nutrition. The success of CCT programmes at reducing poverty depends on whether, and the extent to which, cash transfers affect adult work incentives. In this paper we examine whether the PROGRESA programme of Mexico affects adult participation in the labour market and overall adult leisure time, and we link these effects to the impact of the programme on poverty. Utilising the experimental design of PROGRESA's evaluation sample, we find that the programme does not have any significant effect on adult labour force participation and leisure time. Our findings on adult work incentives are reinforced further by the result that PROGRESA leads to a substantial reduction in poverty. 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The findings indicate that: (i) the differences in income inequality before taxes and transfers between Latin America and Western Europe are much more modest than those after taxes and transfers; (ii) the key reason is that, in contrast with industrial countries, in most Latin American countries the fiscal system is of little help in reducing income inequality; and (iii) in countries where fiscal redistribution is significant, it is achieved mostly through transfers rather than taxes. These facts stress the need for fiscal reforms across the region to further the goal of social equity. However, different countries need to place different relative emphasis on raising tax collection, restructuring the tax system, and improving the targeting of expenditures.Publication Latin America - Determinants of Regional Welfare Disparities within Latin American Countries : Synthesis(World Bank, 2009-05-01)This study analyzes the complicated and dynamic nature of welfare differences across space. The objectives are two-fold. First, the study seeks to provide a methodological framework useful for investigating the determinants of the observed differences in the standards of living between two regions at a given point in time. Second, it aims to provide empirical evidence on regional welfare differences to inform the policy debate surrounding regional inequalities within countries. Chapter two sets the stage by presenting the poverty profiles within and between regions in each of the eight countries in study. Chapter three reviews the methodology, based on the Oaxaca-Blinder (1973) decomposition method used to asses the relative size of the concentration and geography effect in welfare differences across regions/areas. Chapter four reports the findings from various comparisons conducted between urban and rural areas within regions, and urban vs. urban (or rural vs. rural) areas between regions. Chapter five focuses on the role of internal migration within Latin America (LAC) countries. Chapter six summarizes the available empirical evidence regarding the poverty and welfare impacts of the two most distinct types interventions associated with the concentration and the geography views: conditional cash transfers; and territorial development strategies. Chapter seven summarizes findings and discusses some of their main policy implications.Publication Latin America - Determinants of Regional Welfare Disparities within Latin American Countries : Country Case Studies(World Bank, 2009-05-01)This study analyzes the complicated and dynamic nature of welfare differences across space. The objectives are two-fold. First, the study seeks to provide a methodological framework useful for investigating the determinants of the observed differences in the standards of living between two regions at a given point in time. Second, it aims to provide empirical evidence on regional welfare differences to inform the policy debate surrounding regional inequalities within countries. Chapter two sets the stage by presenting the poverty profiles within and between regions in each of the eight countries in study. Chapter three reviews the methodology, based on the Oaxaca-Blinder (1973) decomposition method used to asses the relative size of the concentration and geography effect in welfare differences across regions/areas. Chapter four reports the findings from various comparisons conducted between urban and rural areas within regions, and urban vs. urban (or rural vs. rural) areas between regions. Chapter five focuses on the role of internal migration within Latin America (LAC) countries. Chapter six summarizes the available empirical evidence regarding the poverty and welfare impacts of the two most distinct types interventions associated with the concentration and the geography views: conditional cash transfers; and territorial development strategies. Chapter seven summarizes findings and discusses some of their main policy implications.Publication Fiscal Redistribution and Income Inequality in Latin America(2011)This paper documents and compares the redistributive performance of Latin American and Western European fiscal systems. Three main conclusions emerge: (i) taxes and transfers widen the difference in income inequality between the two country groups, because (ii) the redistributive impact of the fiscal system is very large in Europe and very small in Latin America; and (iii) where fiscal redistribution is significant, it is achieved mostly through transfers rather than taxes. While the priorities of pro-equity fiscal reforms vary across Latin American countries, overall the prospects for major fiscal redistribution lie mainly in raising the volume of resources available for transfers, and improving their targeting, rather than increasing the progressivity of Latin America's tax systems.
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