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The Redistributive Impact of Fiscal Policies in Costa Rica 2010-2018

Author

Listed:
  • Ludovico Feoli
  • Maynor Cabrera

Abstract

Social spending in Costa Rica is sizeable and effectively lowers poverty and inequality. A reliance on indirect taxes on the revenue side reverses a small part of that reduction for Consumable Income. The country devotes a high amount of spending to education and health, so the monetized value of those interventions also has a large positive impact on inequality for Final Income. Comparing results to a previous study shows that Costa Rica’s commitment to progressive social spending has been consistent over the past decade and has helped compensate for a rising trend in inequality. However, a constrained fiscal space and lackluster results in educational and labor market outcomes raise some concerns about the sustainability of these policies.

Suggested Citation

  • Ludovico Feoli & Maynor Cabrera, 2022. "The Redistributive Impact of Fiscal Policies in Costa Rica 2010-2018," Commitment to Equity (CEQ) Working Paper Series 119, Tulane University, Department of Economics.
    • Handle: RePEc:tul:ceqwps:119
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    File URL: http://repec.tulane.edu/RePEc/ceq/ceq119.pdf
    File Function: First version, 2022
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    More about this item

    Keywords

    Costa Rica; fiscal policy; fiscal incidence; inequality; poverty; social spending; taxes;
    All these keywords.

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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