Essays on adjustment and income distribution

Osvaldo Alejandro Larranaga, University of Pennsylvania


The dissertation contains three essays on adjustment and income distribution topics. The first essay studies the distributional implications of fiscal adjustment on social services (education). The issue is analyzed in a stylized intertemporal model which is complemented with numerical simulations based on Chilean data. The results show the implications of several fiscal adjustment policies on current and future poverty and inequality measures. The second essay provides a quantitative assessment of the long run distributional gains of a successful adjustment process. This is done by applying a recent decomposition methodology to microdata from Chilean national household surveys. The results show an optimistic picture about the long run gains of adjustment. The third essay develops an analytical model to study lack of credibility on a reformer regime. Credibility is made an endogenous variable of the distributional aspects of structural adjustment. The main result is the mutual reinforcement between lack of credibility and the incentives economic agents have to change the regime.

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Recommended Citation

Larranaga, Osvaldo Alejandro, "Essays on adjustment and income distribution" (1994). Dissertations available from ProQuest. AAI9427561.