Back to the future: Decomposition analysis of distributive policies using behavioural simulations

Arbeitspapier

For policy makers and analysts, it is important to isolate the redistributive impact of tax-benefit policy changes from changes in the environment in which policies operate. When actual reforms are motivated by work incentives, it is also crucial to evaluate behavioural responses and the distributional consequences thereof. For that purpose, we embed counterfactual simulations in a formal framework based on the Shapley value decomposition and quantify the relative roles of (i) tax-benefit policy changes (direct policy effect), (ii) labour supply responses to the policy reforms (indirect effect) and (iii) all other factors affecting income distribution over time. An application to the UK shows that the redistributive reforms of the 1998-2001 period have offset the increase in inequality that would have occurred otherwise. They also contribute to a strong decline in child poverty and poverty amongst single parent households. In the latter group, a third of the headcount poverty reduction (and half of the reduction in the depth of poverty) is on account of the very large incentive effect of policy changes.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 5226

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; National Government Expenditures and Welfare Programs ; Measurement and Analysis of Poverty
• Thema: tax-benefit policy ; inequality ; poverty ; Shapley value decomposition ; behavioural microsimulation ; labour supply ; Verteilungspolitik ; Steuerpolitik ; Sozialtransfer ; Wirkungsanalyse ; Simulation ; Verteilungswirkung ; Dekompositionsverfahren ; Shapley-Wert ; Großbritannien

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Bargain, Olivier
• Ereignis: Veröffentlichung
• (wer): Institute for the Study of Labor (IZA)
• (wo): Bonn
• (wann): 2010

Weitere Informationen

• Handle: http://hdl.handle.net/10419/46136
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ