INEQUALITY AND FISCAL POLICY IN THE ARGENTINE PROVINCES (1995-2010)
Keywords:
Inequality, Fiscal policy, Subnational governmentsAbstract
This paper studies the personal income distribu- tion and the distributive impact of fiscal policy in Argentina. Observation units are quintiles of per capita income in the 24 sub-national jurisdictions (23 provinces and the City of Buenos Aires) in Ar- gentina during the period 1995-2010. We obtain estimates for market income (ex ante) and exten- ded income (after fiscal policy, or ex post). We present stylized facts to answer several questions arising from fiscal theory. Our main results are: the inequality in the market income varies among provinces; the impact of fiscal policy on income distribution is important and differs among pro- vinces, provoking re-ranking of provinces under ex post inequality; fiscal policy migrated from in kind expenditures during the second half of the 90s to cash transfers during the first decade of 2000s; provincial budgets contribute more than the national budget in decreasing inequality; tax regressivity is due to national taxes.
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