# I. Introduction

Fiscal policy—how public revenue is generated through different taxes and how it is spent—is one of the most powerful tools governments have for reducing poverty and inequality, but not all households are affected in the same way. Fiscal incidence analysis helps to understand who contributes to and benefits from specific fiscal policies and the whole fiscal system taken together. In this type of analysis, the incidence of fiscal policy is assessed for households<sup>2</sup> along the (market or pre-fiscal) income distribution to capture poverty and inequality reduction impacts of the fiscal system. A recent study of such type was conducted for Jordan (Rodriguez and Wai-Poi 2021). However, one could be interested in assessing how the fiscal system affects different types of households, not only across the income distribution, and on how much are poverty and inequality within and across those groups are affected through the fiscal system.

In this study, we look at the gendered impact of Jordan’s fiscal system. This is important because fiscal policy can have impacts for gender equality, not only because different instruments can affect men and women differently, but also because the fiscal system can influence household choices about work and care responsibilities, the distribution of expenses, and even intrahousehold decision-making. In the literature on fiscal incidence, to the extent gender impacts are considered, it tends to be in the reductive form of looking at differences between female- and male-headed households (Greenspun 2019). Femaleheaded households in Jordan are a small and selected group, most of them are widowed women.<sup>3</sup> Consequently, the distinction by the gender of the household head may be insufficient to generate actionable policy recommendations which, for instance, help increase the participation of women in the labour force, and provides few policy-relevant conclusions with respect to the different economic, financial, and social needs of households of different demographic compositions. The study’s first contribution to the literature is on the definition of a household typology for Jordan, which is an exercise that varies across countries. In the absence of a standard typology, we define three groups as an empirical exploration. We construct two typologies based on households’ demographic characteristics, such as their composition by age, number of workers, children in school and pensioners. These characteristics play a significant role in determining which fiscal taxes and transfers a household experience and to what extent. They also influence the participation of women in economic activity outside of the household because they affect the generation and allocation of care responsibilities—how many and who bears them. Due to gendered social norms women often bear a larger burden, which in turn can prevent them from looking for paid employment, or restrict the type, duration, or location of work. We also define a third typology based on the participation of men and women in household income.

Once the household typologies are created, the next step is to assess how much different types of households in Jordan contribute to and benefit from current fiscal policies and the extent to which the fiscal system is helping to equalize post-market outcomes within and across groups. For this part of the analysis, we focus on the fiscal and care groups. Which types of households are benefiting or contributing more to the fiscal system? How much is the fiscal system in Jordan doing to reduce inequality across households? How much is it doing to reduce poverty for the households that need it the most? These are the questions that this study is set to answer.

> 2 Analyses are generally conducted at the household level as data is often only available at this level and the benefits and levies of fiscal policy may not apply at the individual level.

> 3 According to DoS figures from the 2018 LFS, 14 percent of women aged over 15 years old were head of household. Close to three-quarters of them were widows.