CIPR | Center For Inter-American Policy & Research

Tulane University

CEQ Working Paper No 10: Social Spending, Taxes, and Income Redistribution in Uruguay


Social Spending, Taxes, and Income Redistribution in Uruguay
Working Paper No. 10

A working document by:
Marisa Bucheli
Universidad de la República in Uruguay
Nora Lustig
Tulane University
Máximo Rossi
Universidad de la República in Uruguay
Florencia Amábile
Universidad de la República in Uruguay

Abstract
How much redistribution does Uruguay accomplish through social spending and taxes? How progressive are revenue collection and social spending? What could be done to further increase redistribution and improve redistributional effectiveness? A standard fiscal incidence analysis shows that Uruguay achieves a nontrivial reduction in inequality and poverty when all taxes and transfers are combined. Direct taxes are progressive and indirect taxes are practically neutral. Social spending on direct transfers, contributory pensions, education, and health is quite progressive in absolute terms except for tertiary education, which is almost neutral in relative terms. Specific suggestions for improving the effectiveness are suggested.

Access the working document here:
Updated July 2013
CEQ Working Paper No 10: Social Spending, Taxes, and Income Redistribution in Uruguay

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