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Changes in Income Distributions and the Role of Tax-benefit Policy During the Great Recession: An International Perspective. ESRI WP474. January 2014

Bargain, Oliver and Callan, Tim and Doorley, Karina and Keane, Claire (2014) Changes in Income Distributions and the Role of Tax-benefit Policy During the Great Recession: An International Perspective. ESRI WP474. January 2014. [Working Paper]

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    Abstract

    This paper examines the impact on inequality and poverty of the economic crisis in four European countries, namely France, Germany, the UK and Ireland, and the contribution of tax and benefit policy changes. The period examined, 2008 to 2010, was one of great economic turmoil, yet it is unclear whether changes in inequality and poverty rates over this time period were mainly driven by changes in market income distributions or by tax-benefit policy reforms. We disentangle these effects by producing counterfactual ("no reform") scenarios using tax-benefit microsimulation and representative household surveys of each country. For the period under study, we find that the policy reaction has contributed to stabilizing or even decreasing inequality and relative poverty in the UK, France and especially in Ireland, a country where rising unemployment would have otherwise increased poverty. Market income inequality has nonetheless pushed up inequality and relative poverty in France. Relative poverty and, notably, child poverty, have increased in Germany due to policy responses combined with the increasing inequality of market income.

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    Item Type: Working Paper
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > tax policy
    EU policies and themes > Policies & related activities > economic and financial affairs > monetary policy
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Economic and Social Research Institute (ESRI), Dublin > ESRI Working Papers
    Depositing User: Alyssa McDonald
    Official EU Document: No
    Language: English
    Date Deposited: 08 Nov 2019 11:46
    Number of Pages: 39
    Last Modified: 08 Nov 2019 11:46
    URI: http://aei.pitt.edu/id/eprint/88089

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