Report
To reduce income inequality: Public or "private" redistribution?
We will use the example of France to illustrate our analysis. To reduce income inequality, one can first use public redistribution: public transfer payments to the lowest income earners, progressive taxation on incomes. But such redistribution reaches a limit: its financing requires an increase in the tax burden, with the associated negative effects on employment in particular. We can then consider another type of redistribution, i.e. private redistribution. It works as follows: Low wages in a number of sectors are increased; Companies in these sectors then raise their selling prices, thus avoiding a negative effect of the rise in low wages on low-skilled employment; Other wages are not modified or indexed to price increases (which also prevents a macroeconomic cost competitiveness problem). There is then redistribution in favour of people with low wages, financed by a tax (linked to the rise in prices) on other households.
Provider
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.
Patrick Artus
Other Reports from Natixis
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.