Income Distribution Determinants and Public Spending Efficiency
Technical University of Lisbon - ISEG (School of Economics and Management); UECE (Research Unit on Complexity and Economics); European Central Bank (ECB)
European Central Bank (ECB)
Inter-American Development Bank (IADB)
ECB Working Paper No. 861
In this paper we examine the impact of public spending, education, and institutions on income distribution in advanced economies. We also assess the efficiency of public spending in redistributing income by using a DEA (Data Envelopment Analysis) nonparametric approach. We find that public policies significantly affect income distribution, notably via social spending, and indirectly via high quality education/human capital and via sound economic institutions. Moreover, for our set of OECD countries, and within a two-step approach, several so-called non-discretionary factors help explaining public social spending inefficiencies.
Number of Pages in PDF File: 55
Keywords: income redistribution, public spending, efficiency, DEA
JEL Classification: C14, H40, H50working papers series
Date posted: February 1, 2008
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