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Income Inequality in Small States and the Caribbean: Stylized Facts and Determinants
Author:
Arnold McIntyre
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Mr. Takuji Komatsuzaki
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Mr. Mauricio Vargasnull

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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 036
Language:
English
Publication Date:
12 Feb 2021
DOI:
https://doi.org/10.5089/9781513569475.001
ISBN:
9781513569475
ISSN:
1018-5941
Pages:
22
Keywords:
Small States; economic development; globalization; Gini at market income; absolute redistribution and income redistribution policies.; WP; market Gini coefficient; redistribution policy; market income; FDI inflow; Caribbean dummy variable; idiosyncratic income shock
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Rising income inequality has emerged as a major policy issue facing policymakers, but there is a dearth of empirical work on inequality in small states, including the Caribbean. Despite data limitations, the empirical analysis using a sample of small states finds that increased openness and deeper economic integration including financial market openness is associated with lower income inequality, whereas elevated debt levels limit fiscal space and are associated with higher income inequality. An important policy implication is that well targeted social sector spending aimed at improving education and health indicators will support increased redistribution and reduce income inequality.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2021: Issue 036