Discussion Paper

No. 2013-63 | December 10, 2013
The Literacy Impact on Tax Revenues


The paper investigates the relationship between tax revenues and literacy level, using a panel-model approach. The dataset covers the period 1996 to 2010 and includes 123 countries. The estimations suggest that the assumed function is nonlinear, with inverted-U and U-shaped curves. More precisely, a very low literacy level is associated with reduced tax revenues. Furthermore, the government inputs increase as the literacy level increases, reaching a maximum point. Beyond this level, the tax revenues decrease even if the literacy has an ascendant tendency, registering a minimum level. Finally, the tax revenues increase in a parallel manner with the literacy index.

Data Set

JEL Classification:

I20, H20, C23


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Cite As

Mihai Mutascu and Dan Danuletiu (2013). The Literacy Impact on Tax Revenues. Economics Discussion Papers, No 2013-63, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2013-63

Comments and Questions

Anonymous - Referee report 1
January 13, 2014 - 09:54

see attached file

Mihai Mutascu - Reply to referee 1
February 26, 2014 - 20:55

Dear referee,

The authors gratefully acknowledge the constructive comments on the paper entitled “The Literacy Impact on Tax Revenues” (Discussion Papers No 2013-63), offered by the anonymous referee. We have responded to all comments and generally agree with those. We express our sincere gratitude for your review, which will ...[more]

... help to improve the quality of the paper significantly.

Mihai Mutascu and Dan Danuletiu