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The Distributional Effects of Fiscal Consolidation

Author

Listed:
  • Laurence M. Ball
  • Davide Furceri
  • Mr. Daniel Leigh
  • Mr. Prakash Loungani

Abstract

This paper examines the distributional effects of fiscal consolidation. Using episodes of fiscal consolidation for a sample of 17 OECD countries over the period 1978–2009, we find that fiscal consolidation has typically had significant distributional effects by raising inequality, decreasing wage income shares and increasing long-term unemployment. The evidence also suggests that spending-based adjustments have had, on average, larger distributional effects than tax-based adjustments.

Suggested Citation

  • Laurence M. Ball & Davide Furceri & Mr. Daniel Leigh & Mr. Prakash Loungani, 2013. "The Distributional Effects of Fiscal Consolidation," IMF Working Papers 2013/151, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2013/151
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    References listed on IDEAS

    as
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