The evolution of tax implicit value judgements, redistribution and income inequality in the UK: 1968 to 2015

Justin van de Ven and Nicolas Hérault ()
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Justin van de Ven: National Institute of Economic and Social Research (NIESR), London, UK
Nicolas Hérault: Melbourne Institute: Applied Economic & Social Research, The University of Melbourne, https://www.findanexpert.unimelb.edu.au/display/person125238
Authors registered in the RePEc Author Service: Nicolas Hérault

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: An issue of interest in the literature that explores the drivers of inequality is the distributional bearing of tax and transfer policy, where an important theme concerns changes in the relative treatment of alternative population subgroups. We develop an empirical approach for quantifying the value judgements implicit in the relative treatment of demographic subgroups by a tax and transfer system. We apply this approach to UK data reported at annual intervals between 1968 and 2015, documenting remarkable improvements in tax and transfer treatment enjoyed by some population subgroups – particularly families with children and age pensioners – relative to the wider population. We show that accounting for the changing value judgements implicit in tax and transfer policy provides a fresh perspective on the evolution of income inequality and redistribution; one that departs from the prevailing view that UK inequality stopped rising from the early 1990s.

Keywords: equivalence scale; inequality; redistribution; horizontal equity (search for similar items in EconPapers)
JEL-codes: D31 H23 I38 (search for similar items in EconPapers)
Pages: 134pp
Date: 2019-06
New Economics Papers: this item is included in nep-eur and nep-ltv
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Related works:
Working Paper: The evolution of tax implicit value judgements, redistribution and income inequality in the UK: 1968 to 2015 (2019)
Working Paper: The evolution of tax implicit value judgements, redistribution and income inequality in the UK: 1968 to 2015 (2019)
Working Paper: The evolution of tax implicit value judgements, redistribution and income inequality in the UK: 1968 to 2015 (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:iae:iaewps:wp2019n06

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