Do Poverty and Income Inequality Affect Public Debt?
The aim of this paper is to capture the impact of poverty and income inequality on public debt in European Union countries, providing for the dynamic nature of the response variable. To assess absolute poverty, a new overall deprivation indicator is suggested, a measure that makes it possible to dis...
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| Format: | Article |
| Language: | English |
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Collegium of Economic Analysis, SGH Warsaw School of Economics
2017-12-01
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| Series: | Gospodarka Narodowa. The Polish Journal of Economics |
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| Online Access: | http://www.journalssystem.com/gna/Do-Poverty-and-Income-Inequality-Affect-Public-Debt-,100744,0,2.html |
| _version_ | 1818060042807541760 |
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| author | Ewa Aksman |
| author_facet | Ewa Aksman |
| author_sort | Ewa Aksman |
| collection | DOAJ |
| description | The aim of this paper is to capture the impact of poverty and income inequality on public debt in European Union countries, providing for the dynamic nature of the response variable. To assess absolute poverty, a new overall deprivation indicator is suggested, a measure that makes it possible to distinguish between average deprivation and severe deprivation. To determine income inequality, the unevenness in the distribution of prefiscal income is considered, as this is the factor that is most likely to cause government redistributive spending. A dynamic panel data model (DPD model) is estimated using the bias-corrected LSDV estimator. The results indicate that neither poverty nor income inequality are statistically significant predictors of the public debt-to-GDP ratio. This is because countries that report higher absolute poverty or higher income inequality de facto spend less on social benefits, while countries with higher relative poverty do not have higher social spending than the rest of the sample. |
| first_indexed | 2024-12-10T13:26:08Z |
| format | Article |
| id | doaj.art-bcee56314c2841008d330f97ea710cdb |
| institution | Directory Open Access Journal |
| issn | 0867-0005 2300-5238 |
| language | English |
| last_indexed | 2024-12-10T13:26:08Z |
| publishDate | 2017-12-01 |
| publisher | Collegium of Economic Analysis, SGH Warsaw School of Economics |
| record_format | Article |
| series | Gospodarka Narodowa. The Polish Journal of Economics |
| spelling | doaj.art-bcee56314c2841008d330f97ea710cdb2022-12-22T01:47:11ZengCollegium of Economic Analysis, SGH Warsaw School of EconomicsGospodarka Narodowa. The Polish Journal of Economics0867-00052300-52382017-12-012926799310.33119/GN/100744100744Do Poverty and Income Inequality Affect Public Debt?Ewa AksmanThe aim of this paper is to capture the impact of poverty and income inequality on public debt in European Union countries, providing for the dynamic nature of the response variable. To assess absolute poverty, a new overall deprivation indicator is suggested, a measure that makes it possible to distinguish between average deprivation and severe deprivation. To determine income inequality, the unevenness in the distribution of prefiscal income is considered, as this is the factor that is most likely to cause government redistributive spending. A dynamic panel data model (DPD model) is estimated using the bias-corrected LSDV estimator. The results indicate that neither poverty nor income inequality are statistically significant predictors of the public debt-to-GDP ratio. This is because countries that report higher absolute poverty or higher income inequality de facto spend less on social benefits, while countries with higher relative poverty do not have higher social spending than the rest of the sample.http://www.journalssystem.com/gna/Do-Poverty-and-Income-Inequality-Affect-Public-Debt-,100744,0,2.htmlpublic debt-to-gdp ratiodeprivation indicatorpre-fiscal incomegini coefficientkiviet estimator |
| spellingShingle | Ewa Aksman Do Poverty and Income Inequality Affect Public Debt? Gospodarka Narodowa. The Polish Journal of Economics public debt-to-gdp ratio deprivation indicator pre-fiscal income gini coefficient kiviet estimator |
| title | Do Poverty and Income Inequality Affect Public Debt? |
| title_full | Do Poverty and Income Inequality Affect Public Debt? |
| title_fullStr | Do Poverty and Income Inequality Affect Public Debt? |
| title_full_unstemmed | Do Poverty and Income Inequality Affect Public Debt? |
| title_short | Do Poverty and Income Inequality Affect Public Debt? |
| title_sort | do poverty and income inequality affect public debt |
| topic | public debt-to-gdp ratio deprivation indicator pre-fiscal income gini coefficient kiviet estimator |
| url | http://www.journalssystem.com/gna/Do-Poverty-and-Income-Inequality-Affect-Public-Debt-,100744,0,2.html |
| work_keys_str_mv | AT ewaaksman dopovertyandincomeinequalityaffectpublicdebt |