CHILD POVERTY AND INEQUALITY: THE WAY FORWARD

income inequality) which proxies labor market policies. As for

redistributive policies, the following variables were used in

regression analysis: the ratio of direct to indirect taxes (expected ex-

ante to reduce income inequality); the public expenditure on social

security as a share of GDP (expected to reduce mildly inequality,

especially where the share of social insurance is dominant); and the

ratio of pension coverage in the top versus the bottom quintile

(expected ex-ante to raise inequality). Finally, (vi) a LOC political

dummy variable equal to 1 when a country is ruled by a centre-

right or centrist regime, expected ex-ante to reduce inequality

(beyond the impact manifested via the adoption of progressive

social policies). Table 11 presents the matrix of correlation

coefficients between the variables to be included in regression

analysis.

Table 11. Matrix of bilateral correlation coefficients among variables used in

regression analysis

Source: authors’ elaboration