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How Changing Government Spending Affects Inequality

Sep 2013
Policy Brief
By  Juan Carlos Suarez Serrato
In recent years, an important national conversation has begun on the extent and causes of inequality in the United States. A large part of this debate has focused on inequality at the top of the earnings distribution and on related policies including the taxation of top earners. However, there has been less focus on how long-term changes to government spending may affect inequality even when such policies may be much more important. Understanding how changing government spending affects inequality can help us make more informed policy decisions.