Inequality, Redistribution and Crisis: a Comparative Analysis of 5 Countries

This paper analyses government instruments in terms of reducing market inequality. Government redistribution, realized through public spending and taxation, could be considered as a key element in order to ensure a more equal distribution of income between households. The first part of the paper focuses on the study, from a more theoretical perspective, of the role of the different types of tools that can be used by governments: social transfers (pensions, family benefits and unemployment benefits), taxation, conditional cash transfers (more common in developing countries), instruments of fiscal consolidation and the expenditure modifications that a government can carry out during a period of crisis. The second part of the paper entails a series of empirical analyses, based on LIS data, including some in-depth analyses with a specific focus on five countries that experienced a period of crisis: United States, Germany, Norway, Sweden and Brazil. For each country the analysis focuses on the effect of the transfers, taxation and public pensions on inequality.