The effect of tax-benefit changes on the income distribution in EU countries since the beginning of the economic crisis

Arbeitspapier

We compare the distributional effects of policy changes introduced in the period 2008-2013 in twelve EU countries using the EU microsimulation model EUROMOD. The countries, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Latvia, Lithuania, Portugal, Romania and the UK, chose different policy mixes to achieve varying degrees of fiscal consolidation or expansion. We find that comparisons of the size and distributional effects of policy changes over time are sensitive to the counterfactual assumption that is adopted in adjusting 2008 policies for changes in prices and incomes over the period. Nevertheless, it is clear that the direct tax, public pension and cash benefit changes had broadly progressive effects across the pre-policy change income distributions, except in Germany, Estonia and Lithuania. Including increases in VAT alters the comparative picture by making the policy packages appear more regressive, to varying extents. The paper also explores the implications of the policy changes for measures of risk of poverty and examines the incidence of the changes by age.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: EUROMOD Working Paper ; No. EM9/14

Classification and Topics

• Classification: Wirtschaft ; Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access ; Social Security and Public Pensions
• Subject: Tax-benefit policy reform ; European Union ; Income distribution ; Microsimulation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): De Agostini, Paola ; Paulus, Alari ; Sutherland, Holly ; Tasseva, Iva
• Event: Veröffentlichung
• (who): University of Essex, Institute for Social and Economic Research (ISER)
• (where): Colchester
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/113333
• Last update: 10.03.2025, 11:42 AM CET