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The Distributional Impact of In Kind Public Benefits in European Countries

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  • Paulus, Alari

    ()
    (ISER, University of Essex)

  • Sutherland, Holly

    ()
    (ISER, University of Essex)

  • Tsakloglou, Panos

    ()
    (Athens University of Economics and Business)

Abstract

International comparisons of inequality based on measures of disposable income may not be valid if the size and incidence of publicly-provided in kind benefits differ across the countries considered. The benefits that are financed by taxation in one country may need to be purchased out of disposable income in another. We estimate the size and incidence of in kind or "non cash" benefits from public housing subsidies, education and health care for five European countries using comparable methods and data. Inequality in the augmented income measure is dramatically lower than in disposable income, with the effects of the three components varying in importance across countries. Adapting equivalence scales to take proper account of differences in needs for health care and education across population members reduces the scale of the effect, but does not eliminate it.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4581.

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Length: 36 pages
Date of creation: Nov 2009
Date of revision:
Publication status: Published in: Journal of Policy Analysis and Management, 2010, 29(2), 243–266
Handle: RePEc:iza:izadps:dp4581

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Keywords: inequality; in kind transfers; cross-national comparisons;

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