Changes in Income Distribution and the Role of Tax-benefit Policy During the Great Recession: An International Perspective
This paper examines the impact on inequality and poverty of the economic crisis in four European countries, namely France, Germany, the UK and Ireland, and the contribution of tax and benefit policy changes. The period examined, 2008 to 2010, was one of great economic turmoil, yet it is unclear whether changes in inequality and poverty rates over this time period were mainly driven by changes in market income distributions or by tax-benefit policy reforms. We disentangle these effects by producing counterfactual ("no reform") scenarios using tax-benefit microsimulation and representative household surveys of each country. For the period under study, we find that the policy reaction has contributed to stabilizing or even decreasing inequality and relative poverty in the UK, France and especially in Ireland, a country where rising unemployment would have otherwise increased poverty. Market income inequality has nonetheless pushed up inequality and relative poverty in France. Relative poverty and, notably, child poverty, have increased in Germany due to policy responses combined with the increasing inequality of market income.
|Date of creation:||06 Dec 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44 (0)1206 872957
Fax: +44 (0)1206 873151
Web page: https://www.iser.essex.ac.uk/euromod/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- O'Donoghue, Cathal & Loughrey, Jason & Morrissey, Karyn, 2013.
"Using the EU-SILC to Model the Impact of the Economic Crisis on Inequality,"
IZA Discussion Papers
7242, Institute for the Study of Labor (IZA).
- Cathal O’Donoghue & Jason Loughrey & Karyn Morrissey, 2013. "Using the EU-SILC to model the impact of the economic crisis on inequality," IZA Journal of European Labor Studies, Springer, vol. 2(1), pages 1-26, December.
- Karl BRENKE & Ulf RINNE & Klaus F. ZIMMERMANN, 2013.
"Short-time work: The German answer to the Great Recession,"
International Labour Review,
International Labour Organization, vol. 152(2), pages 287-305, 06.
- Brenke, Karl & Rinne, Ulf & Zimmermann, Klaus F., 2011. "Short-Time Work: The German Answer to the Great Recession," IZA Discussion Papers 5780, Institute for the Study of Labor (IZA).
- Brenke, Karl & Rinne, Ulf & Zimmermann, Klaus F, 2011. "Short-Time Work: The German Answer to the Great Recession," CEPR Discussion Papers 8449, C.E.P.R. Discussion Papers.
- Bargain, Olivier & Callan, Tim, 2007.
"Analysing the effects of tax-benefit reforms on income distribution: a decomposition approach,"
EUROMOD Working Papers
EM5/07, EUROMOD at the Institute for Social and Economic Research.
- Olivier Bargain & Tim Callan, 2010. "Analysing the effects of tax-benefit reforms on income distribution: a decomposition approach," Journal of Economic Inequality, Springer, vol. 8(1), pages 1-21, March.
- Olivier Bargain & Tim Callan, 2007. "Analysing the Effects of Tax-benefit Reforms on Income Distribution: A Decomposition Approach," Working Papers 200728, Geary Institute, University College Dublin.
- Bargain, Olivier & Callan, Tim, 2007. "Analysing the Effects of Tax-Benefit Reforms on Income Distribution: A Decomposition Approach," IZA Discussion Papers 3078, Institute for the Study of Labor (IZA).
- Olivier Bargain & Tim Callan, 2007. "Analysing the Effects of Tax-benefit Reforms on Income Distribution - A Decomposition Approach," Working Papers 200713, School Of Economics, University College Dublin.
- Olivier Bargain & Tim Callan, 2007. "Analysing the Effects of Tax-benefit Reforms on Income Distribution: A decomposition Approach," Papers WP197, Economic and Social Research Institute (ESRI).
- Holly Sutherland & Francesco Figari, 2013.
"EUROMOD: the European Union tax-benefit microsimulation model,"
International Journal of Microsimulation,
International Microsimulation Association, vol. 1(6), pages 4-26.
- Sutherland, Holly & Figari, Francesco, 2013. "EUROMOD: The European Union Tax-Benefit Microsimulation Model," EUROMOD Working Papers EM8/13, EUROMOD at the Institute for Social and Economic Research.
- Olivier Bargain & Herwig Immervoll & Andreas Peichl & Sebastian Siegloch, 2012. "Distributional consequences of labor-demand shocks: the 2008–2009 recession in Germany," International Tax and Public Finance, Springer, vol. 19(1), pages 118-138, February.
- Callan,Tim & Keane,Claire & Savage,Michael & Walsh,John R., 2012. "Distributional Impact of Tax, Welfare and Public Sector Pay Policies: 2009-2012," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2012(4-Winter ).
- Dardanoni, Valentino & Lambert, Peter J., 2002. "Progressivity comparisons," Journal of Public Economics, Elsevier, vol. 86(1), pages 99-122, October.
- Bruckmeier, Kerstin & Wiemers, Jürgen, 2011. "A new targeting - a new take-up? : non-take-up of social assistance in Germany after social policy reforms," IAB Discussion Paper 201110, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
- Doorley, Karina & Eichhorst, Werner & Kendzia, Michael J., 2013. "Report No. 52: The Social and Employment Situation in Ireland (Update February 2013)," IZA Research Reports 52, Institute for the Study of Labor (IZA).
- Tom Clark & Andrew Leicester, 2004. "Inequality and two decades of British tax and benefit reform," Fiscal Studies, Institute for Fiscal Studies, vol. 25(2), pages 129-158, June.
When requesting a correction, please mention this item's handle: RePEc:ese:emodwp:em21-13. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paul Groves)
If references are entirely missing, you can add them using this form.