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Distributive Effects of the Crisis and Austerity in Seven EU Countries

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  • Manos Matsaganis
  • Chrysa Leventi

Abstract

European welfare states are under considerable stress. On the one hand, the recession has caused unemployment to rise and household incomes to fall, which both raise the demand for social protection. On the other hand, austerity policies and programme reforms affect the capacity of welfare states to provide social protection. This paper aims to provide an early assessment of the distributional implications of the economic developments in Greece, Spain, Italy, Portugal, Latvia, Lithuania and Romania in the period 2009-13. Using a microsimulation model, we attempt to disentangle the first-order effects of tax-benefit policies from the overall effects of the crisis. Moreover, we estimate how the burden of the crisis has been shared across income groups, and how the differential impact of the crisis may have altered the composition of the population in poverty. We conclude by discussing the methodological pitfalls and policy implications of our research.

Suggested Citation

  • Manos Matsaganis & Chrysa Leventi, 2014. "Distributive Effects of the Crisis and Austerity in Seven EU Countries," ImPRovE Working Papers 14/04, Herman Deleeck Centre for Social Policy, University of Antwerp.
  • Handle: RePEc:hdl:improv:1404
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    Cited by:

    1. Nolan, Matt, 2018. "Did tax-transfer policy change New Zealand disposable income inequality between 1988 and 2013?," Working Paper Series 20842, Victoria University of Wellington, Chair in Public Finance.
    2. Tassos Giannitsis & Stavros Zografakis, 2015. "Greece: Solidarity And Adjustment In Times Of Crisis," IMK Studies 38-2015, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    3. Florent Bresson & Jean-Yves Duclos & Flaviana Palmisano, 2019. "Intertemporal pro-poorness," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 52(1), pages 65-96, January.
    4. Brzezinski, Michal, 2018. "Income inequality and the Great Recession in Central and Eastern Europe," Economic Systems, Elsevier, vol. 42(2), pages 219-247.
    5. Canale, Rosaria Rita & Liotti, Giorgio & Marani, Ugo, 2019. "Structural public balance adjustment and poverty in Europe," Structural Change and Economic Dynamics, Elsevier, vol. 50(C), pages 227-236.
    6. Solé, Meritxell & Souto, Guadalupe & Renteria, Elisenda & Papadomichelakis, Giorgos & Patxot, Concepció, 2020. "Protecting the elderly and children in times of crisis: An analysis based on National Transfer Accounts," The Journal of the Economics of Ageing, Elsevier, vol. 15(C).
    7. Nolan, Matt, 2018. "Did tax-transfer policy change New Zealand disposable income inequality between 1988 and 2013?," Working Paper Series 7661, Victoria University of Wellington, Chair in Public Finance.
    8. Pasi Moisio & Kirsi-Marja Lehtelä & Susanna Mukkila, 2014. "Estimating the poverty reduction effect of tax and benefit policies in Finland 1993-2013 using a microsimulation method," ImPRovE Working Papers 14/06, Herman Deleeck Centre for Social Policy, University of Antwerp.
    9. 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.
    10. 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).

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    More about this item

    Keywords

    austerity; crisis; income distribution; microsimulation; European Union; EU-SILC; EUROMOD;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D3 - Microeconomics - - Distribution
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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