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Redistribution of Taxes and Benefits in Mexico: Evaluation of the 2014 Fiscal Reform on Households

Author

Listed:
  • Luis Huesca.

    (Centro de Investigación en Alimentación y Desarrollo (CIAD) and Département d’économique, Université Laval.)

  • Arturo Robles Valencia.

    (Departamento de Economía, Universidad de Sonora.)

  • Abdelkrim Araar.

    (Département d’économique, Université Laval and Centre sur le Risque, les Politiques Economiques et le Emploi (CIRPEE))

Abstract

We measured, for the first time, the general redistributive effect in the Mexican fiscal system with the Duclos-Jalbert-Araar decomposition approach, obtaining: vertical equity, horizonal inequity (hi) and reranking effect. The novelty of this application lies in the use of non-parametric techniques and the fact that we did not assume any functional relationship between the variables in our analysis. Our paper contributes with an assessment of the fiscal reform that took place in 2014 and compares it with the previous situation. A tax-benefit system with relative progressivity but high hi effect is found, as well as an increase on tax revenues up to 5.2 and 3.7 percent of gdp for income tax and vat respectively.

Suggested Citation

  • Luis Huesca. & Arturo Robles Valencia. & Abdelkrim Araar., 2015. "Redistribution of Taxes and Benefits in Mexico: Evaluation of the 2014 Fiscal Reform on Households," Economía: teoría y práctica, Universidad Autónoma Metropolitana, México, vol. 43(2), pages 103-131, Julio-Dic.
    • Handle: RePEc:ety:journl:v:43:y:2015:i:2:p:103-131
    DOI: 10.24275/ETYPUAM/NE/432015/Huesca
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    Cited by:

    1. Luis Huesca, 2017. "Income redistribution and inequality in the Mexican tax-benefit system," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID, vol. 36(72), October.

    More about this item

    Keywords

    progressivity; redistribution; vertical equity; horizontal inequity; non-parametricanalysis.;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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