Antipoverty Effects of Various Social Transfers and Income Taxes Across Countries

Koen Caminada (), Kees Goudswaard, Chen Wang () and Jinxian Wang ()
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Koen Caminada: Leiden University and Netspar
Chen Wang: Shanghai University of Finance and Economics and Leiden University
Jinxian Wang: Central South University China and Leiden University

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2021, vol. 154, issue 3, No 13, 1055-1076

Abstract: Abstract Most welfare states design their tax/benefit-system to combat income poverty. This paper analyzes the effectiveness of social transfers and income taxes in alleviating poverty. We use micro-data from the Luxembourg Income Study to examine the antipoverty effect of social transfers and income taxes. Our data also allow us to decompose the trajectory of the market income poverty to disposable income poverty into 7 different benefits, income taxes and social contributions. On average across 49 countries, 15 percent of the total population is lifted out of poverty via tax/benefit-systems. As far as specific social programs are concerned, only three programs account for the bulk of total poverty reduction: old-age/disability/survivor scheme (81%), social programs for family and children (14%) and the unemployment scheme (8%).

Keywords: Welfare states; Social income transfers; Income poverty; LIS (search for similar items in EconPapers)
JEL-codes: H53 H55 I32 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11205-020-02572-9

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