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Recent Trends in Income Redistribution in Australia: Can Changes in the Tax-Benefit System Account for the Decline in Redistribution?

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  • Nicolas Herault
  • Francisco Azpitarte

Abstract

type="main" xml:id="ecor12154-abs-0001"> We examine trends in the redistributive impact of the tax-benefit system in Australia between 1994 and 2009 using a framework that allows us to separate the contributions of taxes, benefits, and taxes and benefits combined. Furthermore, we identify the effect of tax-benefit policy reforms on income redistribution over the period. We find that after reaching a peak value in the late 1990s, the redistributive effect of taxes and benefits declined sharply. Although reforms to the tax-benefit system contributed to the decline in redistribution, their contribution was limited compared to the role played by the changes in market income distribution.

Suggested Citation

  • Nicolas Herault & Francisco Azpitarte, 2015. "Recent Trends in Income Redistribution in Australia: Can Changes in the Tax-Benefit System Account for the Decline in Redistribution?," The Economic Record, The Economic Society of Australia, vol. 91(292), pages 38-53, March.
  • Handle: RePEc:bla:ecorec:v:91:y:2015:i:292:p:38-53
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    File URL: http://hdl.handle.net/10.1111/ecor.2015.91.issue-292
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    Cited by:

    1. Darapheak Tin & Chung Tran, 2023. "Lifecycle Earnings Risk and Insurance: New Evidence from Australia," The Economic Record, The Economic Society of Australia, vol. 99(325), pages 141-174, June.
    2. Nicolas Hérault & Guyonne Kalb, 2022. "Understanding the rising trend in female labour force participation," Fiscal Studies, John Wiley & Sons, vol. 43(4), pages 341-363, December.
    3. Hérault, Nicolas & Jenkins, Stephen P., 2021. "Redistributive effect and the progressivity of taxes and benefits: evidence for the UK, 1977–2018," LSE Research Online Documents on Economics 112679, London School of Economics and Political Science, LSE Library.
    4. Chung Tran & Nabeeh Zakariyya, 2019. "Tax Progressivity in Australia: Facts, Measurements and Estimates," ANU Working Papers in Economics and Econometrics 2019-667, Australian National University, College of Business and Economics, School of Economics.
    5. Nicolas Herault & Stephen P. Jenkins, 2021. "Redistributive effect and the progressivity of taxes and benefits: evidence for the UK, 1977–2018," Working Papers 592, ECINEQ, Society for the Study of Economic Inequality.
    6. Gunasinghe, Chandika & Selvanathan, E.A. & Naranpanawa, Athula & Forster, John, 2020. "The impact of fiscal shocks on real GDP and income inequality: What do Australian data say?," Journal of Policy Modeling, Elsevier, vol. 42(2), pages 250-270.
    7. Jinjing Li & Hai Anh La & Denisa M. Sologon, 2021. "Policy, Demography, and Market Income Volatility: What Shaped Income Distribution and Inequality in Australia Between 2002 and 2016?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(1), pages 196-221, March.
    8. LI Jinjing & LA Hai anh & SOLOGON Denisa, 2019. "Policy, demography and market income volatility: What was shaping income distribution in Australia between 2002 and 2016?," LISER Working Paper Series 2019-02, Luxembourg Institute of Socio-Economic Research (LISER).
    9. Vanesa Jorda & Jose M. Alonso, 2020. "What works to mitigate and reduce relative (and absolute) inequality?: A systematic review," WIDER Working Paper Series wp-2020-152, World Institute for Development Economic Research (UNU-WIDER).
    10. Chung Tran & Nabeeh Zakariyya, 2021. "Tax Progressivity in Australia: Facts, Measurements and Estimates†," The Economic Record, The Economic Society of Australia, vol. 97(316), pages 45-77, March.

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