The Distributional Effects of Tax-benefit Policies under New Labour - A Shapley Decomposition
AbstractUsing counterfactual microsimulations, Shapley decompositions of time change in inequality and poverty indices make it possible to disentangle and quantify the relative effect of tax-benefit policy changes, compared to all other effects including shifts in the distribution of market income. Using this approach also helps to clarify the different issues underlying the distributional evaluation of policy reforms. An application to the UK (1998-2001) confirms previous findings that inequality and depth of poverty would have increased under the first New Labour government, had important reforms like the extensions of income support and tax credits not been implemented. These reforms have also contributed to substantially reduce poverty among families with children and pensioners.
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Bibliographic InfoPaper provided by School Of Economics, University College Dublin in its series Working Papers with number 200907.
Length: 21 pages
Date of creation: 06 Feb 2009
Date of revision:
Tax-benefit policy; inequality; poverty; Shapley decomposition; microsimulation;
Other versions of this item:
- Olivier Bargain, 2009. "The Distributional Effects of Tax-benefit Policies under New Labour: A Shapley Decomposition," Working Papers 200918, Geary Institute, University College Dublin.
- Bargain, Olivier, 2009. "The Distributional Effects of Tax-Benefit Policies under New Labour: A Shapley Decomposition," IZA Discussion Papers 4296, Institute for the Study of Labor (IZA).
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-03 (All new papers)
- NEP-CMP-2009-07-03 (Computational Economics)
- NEP-PUB-2009-07-03 (Public Finance)
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