Arbeitspapier
Insurance, redistribution, and the inequality of lifetime income
In this paper, we study how the tax-and-transfer system reduces the inequality of lifetime income by redistributing lifetime earnings between individuals with different skill endowments and by providing individuals with insurance against lifetime earnings risk. Based on a dynamic life-cycle model, we find that redistribution through the tax-and-transfer system offsets around half of the inequality in lifetime earnings that is due to differences in skill endowments. At the same time, taxes and transfers mitigate around 60% of the inequality in lifetime earnings that is attributable to employment and health risk. Progressive taxation of annual earnings provides little insurance against lifetime earnings risk. The lifetime insurance effects of taxation may be improved by moving to a progressive tax on lifetime earnings. Similarly, the lifetime insurance and redistributive effects of social assistance may be improved by requiring wealthy individuals to repay any social assistance received when younger.
- Language
-
Englisch
- Bibliographic citation
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Series: DIW Discussion Papers ; No. 1716
- Classification
-
Wirtschaft
Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Education and Inequality
Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
Time Allocation and Labor Supply
Wage Level and Structure; Wage Differentials
- Subject
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lifetime earnings
lifetime income
tax-and-transfer system
taxation
unemployment insurance
disability benefits
social assistance
inequality
redistribution
insurance
endowments
risk
dynamic life-cycle models
- Event
-
Geistige Schöpfung
- (who)
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Haan, Peter
Kemptner, Daniel
Prowse, Victoria
- Event
-
Veröffentlichung
- (who)
-
Deutsches Institut für Wirtschaftsforschung (DIW)
- (where)
-
Berlin
- (when)
-
2017
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
This object is provided by:
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Haan, Peter
- Kemptner, Daniel
- Prowse, Victoria
- Deutsches Institut für Wirtschaftsforschung (DIW)
Time of origin
- 2017
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Peter Haan, B. zu Owen, wegen Diebstahls von zwei silbernen Löffeln und einem Brotmesser zu Kirchheim gef., jedoch auf Fürbitte freigel., nachdem er sich anstatt des Rechts für eine Verschreibung entschieden hatte, gelobt, zur Strafe für sein Vergehen 15 fl an dem Herzog zu zahlen, sich künftig wohl zu verhalten, und schwört U. Er stellt ferner 3 Bürgen, die sich verpflichten, ihn im Fall der Übertretung dieser U. binnen 14 Tagen festzunehmen und der Obrigkeit zu überantworten oder, wenn dies nicht geschähe, 100 fl zu bezahlen. Bürgen: Veit Knoll, Lentz Henlin, Gall Bintz, alle von Owen, seine Brüder und Vettern.
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Peter Haan, B. zu Owen, wegen Diebstahls von zwei silbernen Löffeln und einem Brotmesser zu Kirchheim gef., jedoch auf Fürbitte freigel., nachdem er sich anstatt des Rechts für eine Verschreibung entschieden hatte, gelobt, zur Strafe für sein Vergehen 15 fl an dem Herzog zu zahlen, sich künftig wohl zu verhalten, und schwört U. Er stellt ferner 3 Bürgen, die sich verpflichten, ihn im Fall der Übertretung dieser U. binnen 14 Tagen festzunehmen und der Obrigkeit zu überantworten oder, wenn dies nicht geschähe, 100 fl zu bezahlen. Bürgen: Veit Knoll, Lentz Henlin, Gall Bintz, alle von Owen, seine Brüder und Vettern.
Midijob reform: Increased redistribution in pension insurance - noticeable costs, relief not well targeted
Insurance, Redistribution, and the Inequality of Lifetime Income
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Inequality and Defined Benefit Pensions when Life Expectancy is Heterogeneous
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Optimal social assistance and unemployment insurance in a life-cycle model of family labor supply and savings
Insurance, redistribution, and the inequality of lifetime income
Insurance, Redistribution, and the Inequality of Lifetime Income
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Peter Haan, B. zu Owen, wegen Diebstahls von zwei silbernen Löffeln und einem Brotmesser zu Kirchheim gef., jedoch auf Fürbitte freigel., nachdem er sich anstatt des Rechts für eine Verschreibung entschieden hatte, gelobt, zur Strafe für sein Vergehen 15 fl an dem Herzog zu zahlen, sich künftig wohl zu verhalten, und schwört U. Er stellt ferner 3 Bürgen, die sich verpflichten, ihn im Fall der Übertretung dieser U. binnen 14 Tagen festzunehmen und der Obrigkeit zu überantworten oder, wenn dies nicht geschähe, 100 fl zu bezahlen. Bürgen: Veit Knoll, Lentz Henlin, Gall Bintz, alle von Owen, seine Brüder und Vettern.
Midijob reform: Increased redistribution in pension insurance - noticeable costs, relief not well targeted
Insurance, Redistribution, and the Inequality of Lifetime Income
Insurance, redistribution, and the inequality of lifetime income
Inequality and Defined Benefit Pensions when Life Expectancy is Heterogeneous
Lifetime inequality and redistribution