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International Trends in Income Inequality and Social Policy

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Author Info
Koen Caminada ()
Kees Goudswaard ()
Abstract

In most OECD-countries income inequality has increased during the last two decades. In this paper, we investigate whether changes in the overall distribution of income can be attributed to social policy measures. For most (but not all) countries we find a possible relationship between changing welfare state policies (as measured by expenditure ratios and replacement rates) and changing income inequality. Especially the United Kingdom and the Netherlands combined an above-average rise in inequality with a reduction in the generosity of the welfare system. A more elaborate budget incidence analysis for the Netherlands indicates that in the period 1981–1997 inequality of disposable household income increased sharply. The two main forces behind this phenomenon were a more unequal distribution of market incomes and changes in social transfers. Fundamental social security reforms in the Netherlands indeed seem to have made the income distribution less equal. However, income inequality in the Netherlands is still below the OECD average at the end of the observed period. Copyright Kluwer Academic Publishers 2001

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Publisher Info
Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 8 (2001)
Issue (Month): 4 (August)
Pages: 395-415
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Handle: RePEc:kap:itaxpf:v:8:y:2001:i:4:p:395-415

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Related research
Keywords: social policy; income distribution (indices); taxes and transfers;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Jean-Yves Duclos, 2000. "Gini Indices and the Redistribution of Income," International Tax and Public Finance, Springer, vol. 7(2), pages 141-162, March. [Downloadable!] (restricted)
  2. Anthony B. Atkinson & Andrea Brandolini, 2000. "Promise and Pitfalls in the Use of 'Secondary' Data-Sets: Income Inequality in OECD Countries," Temi di discussione (Economic working papers) 379, Bank of Italy, Economic Research Department. [Downloadable!]
    Other versions:
  3. A. Bovenberg, 2000. "Reforming Social Insurance in The Netherlands," International Tax and Public Finance, Springer, vol. 7(3), pages 345-368, May. [Downloadable!] (restricted)
  4. Anthony B. Atkinson, 2000. "The Changing Distribution of Income: Evidence and Explanations," German Economic Review, Blackwell Publishing, vol. 1(1), pages 3-18, 02. [Downloadable!] (restricted)
  5. Peter Whiteford, 1995. "The Use of Replacement Rates in International Comparisons of Benefit Systems," Discussion Papers 0054, University of New South Wales, Social Policy Research Centre. [Downloadable!]
  6. Kakwani, Nanak C, 1977. "Applications of Lorenz Curves in Economic Analysis," Econometrica, Econometric Society, vol. 45(3), pages 719-27, April. [Downloadable!] (restricted)
  7. Gottschalk, Peter & Smeeding, Timothy M., 2000. "Empirical evidence on income inequality in industrialized countries," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 5, pages 261-307 Elsevier. [Downloadable!] (restricted)
  8. Champernowne, D G, 1974. "A Comparison of Measures of Inequality of Income Distribution," Economic Journal, Royal Economic Society, vol. 84(336), pages 787-816, December. [Downloadable!] (restricted)
  9. Ringen, Stein, 1991. "Households, Standard of Living, and Inequality," Review of Income and Wealth, Blackwell Publishing, vol. 37(1), pages 1-13, March.
  10. Gouyette, Claudine & Pestieau, Pierre, 1999. "Efficiency of the Welfare State," Kyklos, Blackwell Publishing, vol. 52(4), pages 537-53.
  11. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September. [Downloadable!] (restricted)
  12. Paolo Figini, 1998. "Inequality Measures, Equivalence Scales and Adjustment for Household Size and Composition," Economics Technical Papers 988, Trinity College Dublin, Department of Economics. [Downloadable!]
  13. Kakwani, Nanok C, 1977. "Measurement of Tax Progressivity: An International Comparison," Economic Journal, Royal Economic Society, vol. 87(345), pages 71-80, March. [Downloadable!] (restricted)
  14. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," World Bank Economic Review, Oxford University Press, vol. 10(3), pages 565-91, September.
  15. Koen Caminada & Kees Goudswaard, 1996. "Progression and revenue effects of income tax reform," International Tax and Public Finance, Springer, vol. 3(1), pages 57-66, January. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Heshmati, Almas, 2004. "A Review of Decomposition of Income Inequality," IZA Discussion Papers 1221, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Anneli Kaasa, 2003. "Factors Influencing Income Inequality In Transition Economies," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 18, Faculty of Economics and Business Administration, University of Tartu (Estonia). [Downloadable!]
  3. Heshmati, Almas, 2004. "The World Distribution of Income and Income Inequality," IZA Discussion Papers 1267, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Tine Stanovnik & Miroslav Verbic, 2005. "Wage and Income Inequality in Slovenia, 1993-2002," Public Economics 0502002, EconWPA. [Downloadable!]
    Other versions:
  5. Koen Caminada & Kees Goudswaard, 2005. "Are Public and Private Social Expenditures Complementary?," International Advances in Economic Research, Springer, vol. 11(2), pages 175-189, May. [Downloadable!] (restricted)
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