The Long-Run Determinants of Government Receipts

Fiscal Sustainability Conference, p. 381, 2000

42 Pages Posted: 17 Jul 2012

Date Written: January 20, 2000

Abstract

The paper by Carlos Martinez-Mongay focuses on the long-term determinants of government receipts rather than expenditure. The author examines the evolution of revenues in EU countries over the past thirty years as well as the literature on the factors affecting revenue trends in the long run. More specifically, he reviews the role of ageing, economic integration and structural changes. Two sets of econometric estimates are presented. The first is based on a panel of data covering 17 countries (EU members, USA and Japan) over the 1970-1998 period. The second is based on time series analyses at country level for the same sample. Martinez concludes that the long-term determinants of revenues and expenditure are broadly the same: demographic dependency, labour market performance and income. Other structural factors play a secondary role in explaining the evolution of tax burdens in industrial countries. Higher shares of self-employment and manufacturing employment tend to reduce tax receipts, but the effect is relatively small. However, economic integration and technological changes may play a relevant role in shaping tax structures and determining the tax burdens borne by labour, capital and consumption.

Suggested Citation

Martinez-Mongay, Carlos, The Long-Run Determinants of Government Receipts (January 20, 2000). Fiscal Sustainability Conference, p. 381, 2000, Available at SSRN: https://ssrn.com/abstract=2109453 or http://dx.doi.org/10.2139/ssrn.2109453

Carlos Martinez-Mongay (Contact Author)

European Union - European Commission ( email )

Rue de la Loi 200
Brussels, B-1049
Belgium

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