IMF Working Papers

Income Inequality in Small States and the Caribbean: Stylized Facts and Determinants

By Arnold McIntyre, Pablo Bejar, Takuji Komatsuzaki, Mauricio Vargas

February 12, 2021

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Arnold McIntyre, Pablo Bejar, Takuji Komatsuzaki, and Mauricio Vargas. Income Inequality in Small States and the Caribbean: Stylized Facts and Determinants, (USA: International Monetary Fund, 2021) accessed December 30, 2024

Disclaimer: 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.

Summary

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.

Subject: Foreign direct investment, Income, Income distribution, Income inequality, Public debt

Keywords: Absolute redistribution and income redistribution policies., Caribbean dummy variable, Economic development, FDI inflow, Gini at market income, Globalization, Idiosyncratic income shock, Market Gini coefficient, Market income, Redistribution policy, Small States, WP

Publication Details

  • Pages:

    22

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2021/036

  • Stock No:

    WPIEA2021036

  • ISBN:

    9781513569475

  • ISSN:

    1018-5941

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