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National Interests: Priorities and Security
 

On thresholds of income inequality and efficiency of the governmental redistribution policy in Russia

Vol. 14, Iss. 10, OCTOBER 2018

PDF  Article PDF Version

Received: 14 June 2018

Received in revised form: 4 July 2018

Accepted: 23 July 2018

Available online: 15 October 2018

Subject Heading: ECONOMIC POLICY OF THE STATE

JEL Classification: D31, D63, E62, H31, I32

Pages: 1872–1889

https://doi.org/10.24891/ni.14.10.1872

Kormishkina L.A. National Research Ogarev Mordovia State University (MRSU), Saransk, Republic of Mordovia, Russian Federation
kormishkinala@mail.ru

https://orcid.org/0000-0001-6009-3374

Koroleva L.P. National Research Ogarev Mordovia State University (MRSU), Saransk, Republic of Mordovia, Russian Federation
korol.l@mail.ru

https://orcid.org/0000-0002-8375-8524

Importance The article discusses how the redistribution policy of the State influences available household income by decile group. The research focuses on the distribution of monetary income by source (labor income, income from property) and incoming and outgoing transfers.
Objectives The research identifies key patterns and sources of inequality among medium-size households by decile group and evaluates the efficiency of the governmental distribution policy in relation to the normal and excessive income inequality.
Methods The research is based on the sample-based observation of the public income and participation in welfare programs for 2012–2016. We apply general scientific methods and special methods of economic analysis and statistics.
Results We determine the role of various sources of household income in the inequality and detect the skewness in the distribution of monetary income and tax burden by decile group of households. The article introduces new indicators of transfer leverage and coefficient of redistribution allowing to evaluate the role of the redistribution policy in the elimination of excessive inequality. We justify the approach to setting the threshold of net transfers in line with the amount of labor income.
Conclusions and Relevance As part of this research, we identified some patterns in the distribution of labor and other income in budgets of households pertaining to different decile groups, which eliminate positive effects of the normal inequality and fuel excessive inequality. Greater efficiency of the redistribution policy requires to transform the taxation of income and property so as to ensure the progressive principle and social support to low-income people, thereby stimulating the motivation for labor and tackling excessive inequality of income from property.

Keywords: household income, excessive inequality, tax burden, transfer, redistribution policy

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