Report
Patrick Artus

Do large-scale redistributive policies have a cost?

Some countries (Finland, Belgium, Austria, Germany and France) correct very significant primary income inequality through large-scale redistributive policies, which enable them to obtain low income inequality after redistribution. However, such a policy can have a cost: It can reduce the incentive to make an effort (if taxes on high incomes are excessive or the income scale is squeezed ), and also reduce the incentive to pursue long studies; It can require a high tax burden, which is negative for employment and growth. We therefore compare, for OECD countries, the size of redistributive policies and productivity gains, the employment rate, the tax burden and growth. We see that large-scale redi stributive policies go hand in hand with a high tax burden, and low employment and growth rate s .
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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