How would you measure the extent to which public policy in a particular country is redistributive? How would you determine whether there is too much, too little or just about the right amount of redistribution in a particular country?
Introduction
Distribution of income and how it can be redistributed
Main Body
Gini coefficient to see how distribution has changed
Palma ratio
The Palma ratio is an alternative to the Gini index, and focuses on the differences between those in the top and bottom income brackets. The ratio takes the richest 10% of the population’s share of gross national income (GNI) and divides it by the poorest 40% of the population’s share. This measure has become popular as more income inequality research focuses on the growing divide between the richest and poorest in society.
Looking at the distribution of income before and after policy change
Econometric measures of income distribution
Real life examples in any country
Include graphs – how does Lorenz curve change when income is redistributed
Analyse examples
Introduce the measure i.e. taxation as a way or redistributing income
– address the measure – Gini coefficient
Start with possible measures to redistribute income e.g. vat, indirect taxation, direct taxation – corporate, income tax
Then how we measure that
Gini coefficient
– select a policy change then how we measure it
https://www.imf.org/external/pubs/ft/fandd/2018/03/bourguignon.htm
Description
Useful textbooks:
Barr, N. (2012). Economics of the Welfare State. Oxford University Press [there is a new 2020 edition, but all readings refer to the 2012 version. There is also an older 1998 edition. Any version is fine to use.]
Connolly, S. and Munro, A. (1999). Economics of the Public Sector.
Gruber, J. (2019) . Public Finance and Public Policy 6th edition. [older versions of this textbook are also fine]
Myles, G. and Hindriks, J. (2013). Intermediate Public Economics.
