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Income Inequality and Fiscal Redistribution in 31 Countries After the Crisis

Author

Listed:
  • Koen Caminada

    (Leiden University
    Netspar)

  • Kees Goudswaard

    (Leiden University
    Netspar)

  • Chen Wang

    (Leiden University
    Shanghai University of Finance and Economics)

  • Jinxian Wang

    (Leiden University
    Central South University)

Abstract

In this paper, we analyze fiscal redistribution after the Great Recession. Are welfare states still effective in reducing income inequality? We use recent microdata from the Luxembourg Income Study to examine redistribution from transfers and income taxes, and the several underlying social programs that drive the changes in 31 countries. On average, we find that social transfers and income taxes reduce the Gini by 31%. In most countries, pensions are a dominant factor. After performing a number of sensitivity analyses, we conclude that the redistributive impact of the welfare state is still substantial.

Suggested Citation

  • Koen Caminada & Kees Goudswaard & Chen Wang & Jinxian Wang, 2019. "Income Inequality and Fiscal Redistribution in 31 Countries After the Crisis," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(1), pages 119-148, March.
    • Handle: RePEc:pal:compes:v:61:y:2019:i:1:d:10.1057_s41294-018-0079-z
    DOI: 10.1057/s41294-018-0079-z
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    Cited by:

    1. Manuel Schechtl, 2020. "Taxation of Families and “Families of Taxation”? Inequality Modification Between Family Types Across Welfare States," LIS Working papers 800, LIS Cross-National Data Center in Luxembourg.
    2. Lichner, Ivan & Lyócsa, Štefan & Výrostová, Eva, 2022. "Nominal and discretionary household income convergence: The effect of a crisis in a small open economy," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 18-31.
    3. Thomas Leoni & Margit Schratzenstaller, 2020. "Senkung der Lohnnebenkosten und Finanzierungsvarianten. Bisherige Erkenntnisse und internationale Reformbeispiele," WIFO Studies, WIFO, number 66851, February.
    4. Pedro Bação & Marta Simões, 2020. "Is the Welfare State Relevant for Economic Growth? Evidence for Portugal," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 62(3), pages 494-520, September.
    5. Koen Caminada & Kees Goudswaard & Chen Wang & Jinxian Wang, 2021. "Antipoverty Effects of Various Social Transfers and Income Taxes Across Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 154(3), pages 1055-1076, April.
    6. Pedro Bação & Marta Simões, 0. "Is the Welfare State Relevant for Economic Growth? Evidence for Portugal," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 0, pages 1-27.
    7. Shubin Wang & Junsheng Ha & Hakan Kalkavan & Serhat Yüksel & Hasan Dinçer, 2020. "IT2-Based Hybrid Approach for Sustainable Economic Equality: A Case of E7 Economies," SAGE Open, , vol. 10(2), pages 21582440209, May.
    8. Coady, David & D’Angelo, Devin & Evans, Brooks, 2020. "Fiscal redistribution and social welfare: doing more or more to do?," EUROMOD Working Papers EM10/20, EUROMOD at the Institute for Social and Economic Research.

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    More about this item

    Keywords

    Welfare states; Social income transfers; Inequality; Gini coefficient;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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