Scale of redistributive policies: Cause and consequences
We look at the scale of redistributive policies for OECD countries by comparing the GINI income inequality index before and after redistribution. We ask the following questions: Are large-scale redistributive policies associated with high income inequalities before redistribution, as could be expected? The answer is yes; Do large-scale redistributive policies lead to a high tax burden (total, on companies, as regards high social contributions paid by companies)? The answer is yes; Are large-scale redistributive policies associated with a low employment rate? The answer is yes, via the effect of the tax burden on the employment rate. These correlations clearly confirm the pattern where: A low employment rate leads to high income inequality before redistribution; There are then large-scale redistributive policies, the financing of which leads to a high tax burden, particularly in the form of high corporate social contributions; And this drives down the employment rate further .