Effects of Alternative Policies on Income Redistribution: Evidence from Brazil

Effects of Alternative Policies on Income Redistribution: Evidence from Brazil

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Article ID: iaor20107359
Volume: 27
Issue: 5
Start Page Number: 601
End Page Number: 616
Publication Date: Sep 2009
Journal: Development Policy Review
Authors: , ,
Keywords: Brazil, input-output analysis
Abstract:

Despite recent successes, Brazilian income (cash) transfer policies remain controversial, and alternative approaches to income redistribution are being actively considered. This article contributes to this debate, analysing the effects of several alternative policies for income redistribution in the Brazilian economy using a computable general equilibrium model. Simulations were conducted consistent with the following policies: direct transfer of income, reduction of taxes, and incentives to agricultural exports. The results suggest that transfer of income is the most effective in promoting redistribution of income, with a positive impact on the level of welfare of the poorest households.

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