| Resumen: |
This study measures the extent to which publicly-subsidized transfers in Latin America and the
Caribbean (LAC) redistribute income. The redistributive power of 56 transfers in eight countries is
measured by their coverage, size, absolute incidence, simulated impacts on poverty and inequality, and
by their distributional characteristic, a statistic derived from taxation literature.
Our findings suggest that public transfers can be effective instruments to redistribute income to the
poor. Yet frequently they have not managed to do so. Indeed, Robin Hood works in both directions
in LAC, with public transfers redistributing income to both the rich and the poor. The redistributive
impacts from social insurance are limited – and even regressive in some countries. This regressivity
derives from two main design factors: a truncation in coverage due to requirements of membership in
formal labor markets which exclude the majority of the poor, and highly generous unit benefits for
those in the upper quintiles. Moreover, this regressivity applies to net social insurance transfers, which
are subsidized by government budgets at the expense of all taxpayers. |
