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Redistribution by the Austrian State

Author

Listed:
  • Silvia Rocha-Akis

    (WIFO)

  • Jürgen Bierbaumer-Polly

    (WIFO)

  • Martina Einsiedl

    (WIFO)

  • Alois Guger

    (WIFO)

  • Michael Klien

    (WIFO)

  • Thomas Leoni

    (WIFO)

  • Hedwig Lutz

    (WIFO)

  • Christine Mayrhuber

    (WIFO)

Abstract

The analysis of the redistributive effects of the state activities in Austria in the year 2010 follows previous work carried out by WIFO. In Austria, the available redistribution potential is of a scale similar to that in the Scandinavian countries, Belgium, France and Italy. In 2010, the overall tax ratio stood at 40.8 percent, 4.2 percentage points above the EU 15 average. Redistribution primarily takes place through public expenditures. Due to the regressive structure of indirect taxes and social insurance contributions, and the comparatively low weight of taxes on income and capital, the total redistributive effect of the tax system is only modest. The redistribution effect is much larger when it comes to public welfare and social services: apart from old-age pensions, monetary and in-kind benefits mostly relate to the areas of health care, education and families, to be enjoyed to a similar extent by all households irrespective of their income so that their relative importance is much greater for low-income than for high-income households. Being more highly exposed to risks such as unemployment and illness, benefits relating to unemployment, social assistance, housing assistance, survivor's pensions, long-term care benefits, as well as some family benefits such as the child-care allowance and the public child care infrastructure are typically taken up more frequently by low-income households for whom they constitute a substantial part of their income. Over the years of the investigations 2000, 2005 and 2010, the distribution of primary incomes (market incomes and old-age pensions) became substantially more unequal, especially in the second half of the decade – a development that was not offset by the state's redistribution efforts. This effect is primarily driven by a drifting apart of very low and very high market incomes. Moreover, a rise in the share of persons without market or pension income could be observed. In a similar vein, the distribution of secondary household incomes (primary incomes plus monetary and in-kind public transfers, net of all direct and indirect taxes), which had remained relatively stable between 2000 and 2005, was found to be more unequal in 2010 than in the mid-2000ies.

Suggested Citation

  • Silvia Rocha-Akis & Jürgen Bierbaumer-Polly & Martina Einsiedl & Alois Guger & Michael Klien & Thomas Leoni & Hedwig Lutz & Christine Mayrhuber, 2016. "Redistribution by the Austrian State," WIFO Studies, WIFO, number 58820.
  • Handle: RePEc:wfo:wstudy:58820
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    File URL: https://www.wifo.ac.at/wwa/pubid/58820
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    References listed on IDEAS

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