In this chapter: Distinguish primary from secondary income distribution, understand the redistributive impact of the budget on secondary income distribution, explain the calculation of a Gini coefficient, identify the excess burden of a subsidy, show how a subsidy could be welfare-enhancing if there are positive externalities associated with consumption of certain goods (e.g. Food for the poor),...
Trang 2• Distinguish primary from secondary income distribution
• Understand the redistributive impact of the budget on
secondary income distribution
• Explain the calculation of a Gini coefficient
• Identify the excess burden of a subsidy
• Show how a subsidy could be welfare-enhancing if there are
positive externalities associated with consumption of certain goods (e.g Food for the poor)
• Distinguish between the impact of a cash transfer and a subsidy
in kind
• Show how social transfers may create a disincentive to work
• Identify major trends in fiscal incidence in South Africa,
particularly with regard to social spending
• Understand the redistributive impact of some major social
policy interventions in South Africa
Trang 3Country % Population Living Below International
Poverty Line (< $1 per day)
The Gini coefficient
• Measure of inequality
• High coefficient indicates high inequality
Trang 5• Actual value of income received in cash or in kind
Primary income
• Primary income less direct taxation, plus value of government services
Secondary income
Trang 6• Fiscal incidence
• Balanced budget incidence
• Government’s distributive role
– Rule maker
– Controller of prices and wages
– Market operator
– Influence on long-term patterns of activities
– Taxer – supplier of public goods & welfare services
– Payer – of transfer incomes
– (Potential) redistributor of assets
Trang 10• School education
• Health
• Social security
– Occupational insurance
– Social assistance
– Means test of social pensions
• Social welfare services
• Housing.