This paper presents a framework for studying international differences in the distribution of household income. Integrating micro-econometric and micro-simulation approaches in a decomposition analysis, it quantifies the role of tax-benefit systems, employment and occupational structures, labour and financial market returns, and demographic composition in accounting for differences in income inequality across countries. Building upon EUROMOD (the European tax-benefit calculator) and its harmonised datasets, the model is portable and can be implemented for crosscountry comparisons between any participating country. An application to the UK and Ireland-two countries that have much in common while displaying different levels of inequality-shows that differences in tax-benefit rules between the two countries account for over one third of the observed difference in disposable household income inequality. Demographic differences play negligible roles. The Irish tax-benefit system is more redistributive than UK's due to a higher tax progressivity and higher average transfer rates. These are largely attributable to policy parameter differences, but also to differences in pre-tax, pre-transfer income distributions.

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The 'watch dog' role of the media, the impact of migration processes, health care access for children in developing countries, mitigation of the effects of Global Warming are typical examples of governance issues -issues to be tackled at the base; issues to be solved by creating and implementing effective policy.The Maastricht Graduate School of Governance, Maastricht University, prepares students to pave the road for innovative policy developments in Europe and the world today. Our master's and PhD programmes train you in analysing, monitoring and evaluating public policy in order to strengthen democratic governance in domestic and international organisations. The School carefully crafts its training activities to give national and international organisations, scholars and professionals the tools needed to harness the strengths of changing organisations and solve today' s challenges, and more importantly, the ones of tomorrow. Authors ABSTRACTThis paper uses ECHP for 14 EU countries to explore the dynamic structure of individual earnings and the extent to which changes in cross-sectional earnings inequality reflect transitory or permanent components of individual lifecycle earnings variation. Overall, the decrease in inequality resulted from a decrease in transitory differentials in Germany, France, UK and Ireland, in permanent differentials in Belgium and Spain, and in both components in Denmark and Austria. The increase in inequality reflects an increase in permanent differentials in Luxembourg, Italy, Greece and Finland, and an increase in both components in Portugal and Netherlands. The decrease in inequality was accompanied by an increase in mobility only in Denmark, Belgium and Spain. Except for Netherlands and Portugal, all countries recording an increase in inequality experienced also a decrease in mobility.JEL Classification: C23, D31, J31, J60

This paper undertakes a near real-time analysis of the income distribution effects of the Covid-19 crisis in Australia to understand the ongoing changes in the income distribution as well as the impact of policy responses. By semi-parametrically combining incomplete observed data from three different sources–the monthly Longitudinal Labour Force Survey, the Survey of Income and Housing and administrative payroll data–we estimate the impact of Covid-19 on the Australian income distribution and decompose its impact into the income shock effect and the policy effect between February and June 2020, covering the immediate periods before and after the initial Covid-19 outbreak. Our results suggest that, despite growth in unemployment, the Gini coefficient of equivalised household disposable income dropped by more than 0.02 points between February and June 2020. This reduction is due to the additional wage subsidies and welfare supports offered as part of the policy response, offsetting the increase in income inequality from the income shock effect. The results shows the effectiveness of temporary policy measures both in maintaining living standards and avoiding increases in income inequality. However, the heavy reliance on the support measures shown in the modelling raises the possibility that the changes in the income distribution may be reversed, or even that inequality and living standards could substantially worsen once the measures are withdrawn.

Isolating the impact of policy, demographic shifts, and market volatility on changes in income inequality is of great interest to policymakers. However, such estimation can be difficult due to the complex interactions and evolutions in the social and economic environment. Through an extended decomposition framework, this paper estimates the effect of four main components (policy, demography, market income and other factors) on the year‐over‐year changes in income inequality in Australia between 2002 and 2016. This was a period marked by substantial policy, population, and economic shifts due to factors such as the mining boom, the global financial crisis and increasing immigration. The framework also incorporates a flexible non‐parametric market income model which captures demand‐side shock better than a standard parametric model. Our results suggest that market income was the primary driver of income inequality for all segments of the income distribution in Australia over the past 15 years. Policy factors, moreover, have had the largest net impact on reducing inequality overall, especially for lower income earners.