EconPapers    
Economics at your fingertips  
 

Distributional Effects of the Child Bonus and the Temporary Reduction in VAT in 2020

Maximilian Blömer, Przemyslaw Brandt, Mosler Martin and Andreas Peichl

ifo Schnelldienst, 2021, vol. 74, issue 02, 45-50

Abstract: The stimulus package adopted in the summer of 2020 included tax cuts, government transfers, and subsidies. This article examines the distributional effects and the impact of the child bonus and the temporary reduction in VAT rates on consumption. The ifo microsimulation model was used to estimate the distributional effects. The child bonus increases average household income and consumer spending compared with a baseline scenario without reform measures. The reform measures also contribute to an improvement in inequality and poverty measures. In particular, lower- and middle-income families, which were and are particularly burdened by the coronavirus crisis, are relatively better off. A half pass-through of the reduction in VAT also increases average consumption by 0.4 percent per household in 2020 compared to the baseline scenario without reform measures. Combined with the child bonus, the increase in consumption is likely to average 0.6 percent per household.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
https://www.ifo.de/DocDL/sd-2021-02-bloemer-etal-k ... aere-mwstsenkung.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ifosdt:v:74:y:2021:i:02:p:45-50

Access Statistics for this article

ifo Schnelldienst is currently edited by Marga Jennewein

More articles in ifo Schnelldienst from ifo Institute - Leibniz Institute for Economic Research at the University of Munich Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().

 
Page updated 2023-11-23
Handle: RePEc:ces:ifosdt:v:74:y:2021:i:02:p:45-50