Structural Reforms and Income Inequality: Who Benefits from Market-Oriented Reforms?

Tasks

We analyze how structural reforms influence income inequality. In particular, we examine whether individual income groups benefit from market-oriented reforms..

Methods

We use panel data models and microeconomic regressions to empirically analyze how indicators of structural reforms influence the distribution of incomes.

Results

We find no statistically significant relationship between structural reforms and the distribution of incomes. We find, however, that households at the bottom of income distribution gain more from structural reforms than individuals at the middle of income distribution. Examining the support for reforms on the household-level, we find that high-income earners tend to support reforms, whereas low-income earners support reforms to a lesser extent. Our results point to misperceptions in how individuals expect reforms to influence their income position.