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Inequalities between retirees and workers: an empirical model to capture the effect of taxation

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  • Bérangère Legendre

    (Paris Dauphine University and University of Orléans)

Abstract

French retirees benefit from specific taxation decreases. These tax exemptions imply considerable public tax expenditures that may be unjustifiable in terms of equity. In this article, we examine the adequacy of tax arrangements for French retirees in the current context of public pension systems reforms. The ratio of retired individuals' income per consumption unit to that of workers was approximately 0.89 in 2003 (0.96 including capital income). Moreover, pensioners' incomes are, on average, 102% of the average income of the population. Inter-cohort inequalities do not seem to justify these tax exemptions. Pensions are more equally distributed than income received from employment, and intra-cohort inequality does not seem to be a more convincing explanation. What is the impact of differential taxation on the inequality between retirees and workers? To answer this question, we propose several empirical models.

Suggested Citation

  • Bérangère Legendre, 2011. "Inequalities between retirees and workers: an empirical model to capture the effect of taxation," Economics Bulletin, AccessEcon, vol. 31(4), pages 2787-2798.
    • Handle: RePEc:ebl:ecbull:eb-11-00524
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    File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I4-P251.pdf
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    References listed on IDEAS

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    1. Najat El Mekkaoui de Freitas & Cindy Duc & Karine Briard & Sabine Mage & Bérangère Legendre, 2011. "Career Interruptions: How Do They Impact Pension Rights?," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 36(3), pages 440-457, July.
    2. repec:dau:papers:123456789/7049 is not listed on IDEAS
    3. Karine Briard & Cindy Duc & Najat El Mekkaoui de Freitas & Bérangère Legendre, 2008. "Aléas de carrière, inégalités et retraite," Post-Print halshs-00257782, HAL.
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    Cited by:

    1. repec:hal:spmain:info:hdl:2441/6o65lgig8d0qcro9oj599gl90 is not listed on IDEAS
    2. Michael Zemmour, 2013. "Les dépenses socio-fiscales ayant trait à la protection sociale : état des lieux," Sciences Po publications info:hdl:2441/6o65lgig8d0, Sciences Po.

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    More about this item

    Keywords

    Taxation of personal incomes; Inequality; Income distribution; Economics of the Elderly;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • D6 - Microeconomics - - Welfare Economics

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