The effect of fiscal drag on income distribution and work incentives: A microsimulation analysis on selected African countries
Adnan Abdulaziz Shahir,
Francesco Figari
Abstract:Although the effect of fiscal drag is well‐studied in the industrialised world, empirical evidence from developing economies remains limited. Against this backdrop, this study aims to explore the effect of fiscal drag on income distribution and work incentives. To this end, the study employs SOUTHMOD, the tax‐benefit microsimulation model, for six African countries: Ethiopia, South Africa, Tanzania, Uganda, Mozambique, and Zambia. Three important conclusions are drawn from our empirical investigation. First, i… Show more
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