The distributional consequences of government spending and taxation in the U.S., 1989 and 2000

Edward N. Wolff, Ajit Zacharias

    Research output: Contribution to journalArticlepeer-review

    Abstract

    We assess the effects of government expenditures and taxation on household economic well-being in the United States in 1989 and 2000. Net government expenditure is estimated as the difference between government expenditures incurred on behalf of the household sector - transfers and public consumption - and the taxes paid by that sector. We incorporate the estimates of net government expenditures into a wealth-adjusted measure of income. We find that overall inequality in our income measure is considerably reduced by net government expenditures. Results from decomposition analysis show that the inequality-reducing effect of net government expenditures owed more to expenditures than to taxes.

    Original languageEnglish (US)
    Pages (from-to)692-715
    Number of pages24
    JournalReview of Income and Wealth
    Volume53
    Issue number4
    DOIs
    StatePublished - Dec 2007

    ASJC Scopus subject areas

    • Economics and Econometrics

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