Household incomes and redistribution in the European Union: quantifying the equalising properties of taxes and benefits
AbstractThe systems of direct taxes and cash benefits in the Member States of the European Union vary considerably in size and structure. We explore their direct impacts on cross-sectional income inequality (termed "redistributive effect" for the purpose of this paper) using EUROMOD, a tax-benefit microsimulation model for the European Union. This relies on harmonised household micro-data representative of each national population together with simulations of entitlements to cash benefits and liabilities for taxes and social contributions. It allows us to draw a more comprehensive â and comparable â picture of the combined effects of transfers and taxes than is usually possible. We decompose the redistributive effect of taxbenefit systems to assess and compare the effectiveness of individual policies at reducing income disparities. We derive results for the 15 "old" members of the European Union and present them for each country separately as well as for the EU-15 as a whole.
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Bibliographic InfoPaper provided by EUROMOD at the Institute for Social and Economic Research in its series EUROMOD Working Papers with number EM9/05.
Date of creation: 01 Jul 2005
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Publication status: published
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- Immervoll, Herwig & Levy, Horacio & Lietz, Christine & Mantovani, Daniela & O'Donoghue, Cathal & Sutherland, Holly & Verbist, Gerlinde, 2006. "Household Incomes and Redistribution in the European Union: Quantifying the Equalising Properties of Taxes and Benefits," Economics Series 184, Institute for Advanced Studies.
- Immervoll, Herwig & Levy, Horacio & Lietz, Christine & Mantovani, Daniela & O'Donoghue, Cathal & Sutherland, Holly & Verbist, Gerlinde, 2005. "Household Incomes and Redistribution in the European Union: Quantifying the Equalising Properties of Taxes and Benefits," IZA Discussion Papers 1824, Institute for the Study of Labor (IZA).
- C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
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