The Incidence of Social Spending and Taxes in Peru

Miguel Jaramillo Baanante
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Miguel Jaramillo Baanante: Group of the Analysis of Development GRADE

No 9, Commitment to Equity (CEQ) Working Paper Series from Tulane University, Department of Economics

Abstract: Standard tax and benefit incidence analysis is used to estimate the effects of fiscal policy on poverty and inequality in Peru. Results suggest that the extent of inequality and poverty reduction induced by Peru’s fiscal policy is small. Results also suggest that the small impact is associated with low social spending rather than with inefficient spending. Most social spending components are progressive and overall social spending is also progressive. We find that direct cash transfers are well targeted and are especially effective in reducing extreme poverty. We also find that in-kind transfers are effective in reducing inequality. Finally, direct and indirect taxes have a positive, though small, effect on inequality.

Keywords: social spending; inequality; poverty; taxes; Peru (search for similar items in EconPapers)
JEL-codes: H2 H5 I3 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2013-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

Published in Commitment to Equity, January 2013, pages 1-15

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http://repec.tulane.edu/RePEc/ceq/ceq09.pdf First version, 2013 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:tul:ceqwps:09

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