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The Redistributive Impact of Fiscal Policy indicator demonstrates the total amount by which current inequality is reduced or increased by the current execution of fiscal policy. 

The Redistributive Impact of Fiscal Policy indicator is defined as the Gini coefficient of pre fiscal per capita (or equivalized) income less the Gini coefficient of post fiscal per capita (or equivalized) income. 
 

Ministry of Economic Development (MED)

Statistical Institute of Belize (SIB)

Ministry of Economic Development (MED)

Statistical Institute of Belize (SIB)

Annual

Currency

Ratio/Index

Prefiscal income: the cumulative income accruing to an individual (or a household) from the market and private sources only.  The Redistributive Impact of Fiscal Policy indicator can be estimated with reference to two different pre fiscal income concepts depending on assumptions regarding the nature of the public, contributory old-age pension system:   
 

1. Prefiscal income under the “pensions as deferred income” scenario: When incomes from public contributory old-age pension-system are counted as deferred market income and old-age pension-system contributions are counted as savings from current income (that is, the old-age pension system is treated as the equivalent of a mandatory savings program), pre fiscal income is defined as an individual’s earned and unearned incomes from the market and other private sources: wages, interest and dividend income; imputed income from owner-occupied housing and from consumption of own production; remittances; private transfers; old-age pension income from the public contributory pension system; and, less any contributions to the public old-age contributory pension system.  In this case, the pre fiscal income concept is called Market income plus pensions. 
2.  Prefiscal income under the “pensions as government transfer” scenario:  When incomes from current pension-system are counted as a government transfer and old age pension-system contributions are counted as a tax on current income, pre fiscal income is defined as wages, interest and dividend income; imputed income from owner-occupied housing and from consumption of own production; remittances; and private transfers only. In this case, the pre fiscal income concept is called Market income. 

Redistributive Impact of Fiscal Policy: defined as the Gini coefficient of prefiscal per capita (or equivalized) income less the Gini coefficient of postfiscal per capita (or equivalized) income. The recommendation is to calculate the Redistributive Impact of Fiscal Policy indicator as the Gini coefficient of prefiscal per capita (or equivalized) income less the Gini coefficient of Consumable per capita (or equivalized) income. 

Gini coefficient: a commonly used measure of inequality capturing the statistical dispersion in the distribution of income or wealth over a population.  A Gini coefficient of zero expresses perfect equality: that is, every individual in the population has the same income. A Gini coefficient of 1 expresses maximum inequality: that is, all income accrues to a single individual, and all other individuals have zero income.   

Per capita income: household income divided by the number of household members. 
 
Equivalized income: household income divided by the square root of the number of household members. If a different definition is used, it should be noted in the reporting document. 
 

The Redistributive Impact of Fiscal Policy indicator can be shown separately for as many different subgroups as are represented in the survey or micro-data from which it is drawn:  income subgroups; by gender, age group, ethnic grouping; geographic location; disability status, household size; household dependency ratios etc.

Prefiscal income can be derived from a nationally-representative micro-data set (an Income and Expenditure Survey, for example). Postfiscal income is estimated via the allocation of the tax burdens and the expenditure-based benefits that stem from fiscal policy (direct and indirect taxes, social contributions, direct cash and near-cash transfers, subsidies, et cetera). Procedures for constructing prefiscal and postfiscal income concepts and estimating their distribution from an underlying microdata set are detailed comprehensively in the CEQ Handbook, Lustig, op. cit.  
 
The Gini coefficient is calculated according to standard formulas for a (generalized) Gini coefficient (see, for example, Donaldson and Weymark (1980, 1983) or Yitzhaki (1983)): 
 
 

where X is a random variable of interest with mean μ(X), F(X) is its cumulative distribution function, υ is a parameter tuning the degree of ‘aversion to inequality’. The standard Gini corresponds to υ = 2. Cov is a Covariance estimate

N/A

 The Redistributive Impact of Fiscal Policy indicator does not address wage policy.  It does not include the benefits of public provision of in-kind benefits, such as health, education, sanitation and housing services, which may have both present-day and longer-term impacts on present-day and future inequality.   
 

All the metadata shown above was gathered from the United Nation Statistics Division. The metadata was extracted from https://unstats.un.org/sdgs/metadata/. 

Also,

Postfiscal income: pre fiscal income minus direct and indirect taxes plus transfers and indirect subsidies. The Redistributive Impact of Fiscal Policy indicator can be estimated with reference to two different post fiscal income concepts, Disposable Income and Consumable Income:   
 

• Postfiscal incomes under the “pensions as deferred income” scenario:

 Disposable Income: fiscal income less direct taxes paid and less social insurance contributions made to the public fiscal authority plus the monetary value of benefits received from public expenditures on direct cash or near-cash transfers.  

Consumable Income: pre fiscal income less direct and indirect taxes paid and less social insurance contributions other than for old-age pensions made to the public fiscal authority plus the monetary value of benefits received from public expenditures on direct cash or near-cash transfers and subsidies.  

•  Postfiscal incomes under the “pensions as government transfer” scenario:  

Disposable Income: pre fiscal income less direct taxes paid and less social insurance contributions and less contributory old-age pension contributions made to the public fiscal authority plus the monetary value of benefits received from public expenditures on direct cash or near-cash transfers including contributory pension system transfers.

Consumable Income: pre fiscal income less direct and indirect taxes paid and less social insurance contributions and less contributory old-age pension contributions made to the public fiscal authority plus the monetary value of benefits received from public expenditures on direct cash or near-cash transfers including contributory old-age pension system transfers and subsidies.