Household Incomes and Redistribution in the European Union: Quantifying the Equalising Properties of Taxes and Benefits

Herwig Immervoll, Horacio Levy, Christine Lietz, Daniela Mantovani, Cathal O'Donoghue, Holly Sutherland and Gerlinde Verbist
Additional contact information
Christine Lietz: Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria
Daniela Mantovani: University of Cambridge and Prometeia, Bologna
Holly Sutherland: University of Essex and DIW Berlin
Gerlinde Verbist: University of Antwerp

No 184, Economics Series from Institute for Advanced Studies

Abstract: The systems of direct taxes and cash benefits in the Member States of the European Union vary considerably in size and structure. We explore their direct impacts on cross-sectional income inequality (termed "redistributive effect" for the purpose of this paper) using EUROMOD, a tax-benefit microsimulation model for the European Union. This relies on harmonised household micro-data representative of each national population together with simulations of entitlements to cash benefits and liabilities for taxes and social contributions. It allows us to draw a more comprehensive – and comparable – picture of the combined effects of transfers and taxes than is usually possible. We decompose the redistributive effect of taxbenefit systems to assess and compare the effectiveness of individual policies at reducing income disparities. We derive results for the 15 "old" members of the European Union and present them for each country separately as well as for the EU-15 as a whole.

Keywords: Income inequality; Redistribution; Microsimulation; European Union (search for similar items in EconPapers)
JEL-codes: C81 D31 H22 H55 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2006-02
New Economics Papers: this item is included in nep-eec, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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https://irihs.ihs.ac.at/id/eprint/1688 First version, 2006 (application/pdf)

Related works:
Chapter: Household Incomes and Redistribution in the European Union: Quantifying the Equalizing Properties of Taxes and Benefits (2006)
Working Paper: Household incomes and redistribution in the European Union: quantifying the equalising properties of taxes and benefits (2005)
Working Paper: Household Incomes and Redistribution in the European Union: Quantifying the Equalising Properties of Taxes and Benefits (2005)
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