The role of tax-benefit systems in reducing the gender income gap in Latin America

Deza, María Cecilia, Dondo, Mariana, Jara, H. Xavier ORCID: 0000-0001-6648-2653, Rodríguez, David and Torres, Javier (2025) The role of tax-benefit systems in reducing the gender income gap in Latin America. Social Policy and Administration. ISSN 0144-5596

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Abstract

This paper aims to assess the extent to which cash transfers, direct taxes, and social insurance contributions help to reduce gender income inequalities in seven Latin American countries: Argentina, Bolivia, Colombia, Ecuador, Mexico, Peru, and Uruguay. We apply microsimulation techniques to household survey data and allocate incomes within the household, assuming that each person retains the income they receive (e.g., earnings, benefits targeting mothers) and pays taxes and social insurance contributions on an individual basis according to each country’s rules. Then, we compare gender income ratios based on market (before taxes and benefits) and disposable (after taxes and benefits) income. Our results show that, at the bottom of the distribution, tax-benefit systems significantly reduce gender income disparities in most countries due to the effect of social assistance benefits received by mothers in poor households. Additionally, we find that women have substantially higher poverty rates than men based on individual disposable income. Gender differences in poverty fade away when income is pooled at the nuclear family level and, even more so, at the household level.

Item Type:	Article
Additional Information:	© 2025 The Author(s)
Divisions:	International Inequalities Institute
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor
JEL classification:	D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions J - Labor and Demographic Economics > J1 - Demographic Economics > J16 - Economics of Gender; Non-labor Discrimination J - Labor and Demographic Economics > J7 - Labor Discrimination > J70 - General H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H24 - Personal Income and Other Nonbusiness Taxes and Subsidies I - Health, Education, and Welfare > I3 - Welfare and Poverty > I32 - Measurement and Analysis of Poverty I - Health, Education, and Welfare > I3 - Welfare and Poverty > I38 - Government Policy; Provision and Effects of Welfare Programs
Date Deposited:	05 Aug 2025 13:39
Last Modified:	28 Aug 2025 08:15
URI:	http://eprints.lse.ac.uk/id/eprint/129049

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