Antipoverty Effects of Various Social Transfers and Income Taxes Across Countries

Abstract

Most welfare states design their tax/benefit-system to combat income poverty. This paper analyzes the effectiveness of social transfers and income taxes in alleviating poverty. We use micro-data from the Luxembourg Income Study (LIS) to examine the antipoverty effect of social transfers and income taxes. Our data also allow us to decompose the trajectory of the market income poverty to disposable income poverty into 7 different benefits, income taxes and social contributions.On average across 49 countries, 15 percent of the total population is lifted out of poverty via tax/benefit-systems. As far as specific social programs are concerned, only three programs account for the bulk of total poverty reduction: old-age/disability/survivor scheme (81%), social programs for family and children (14%) and the unemployment scheme (8%).

Socioeconomic status and disparities in COVID-19 vaccine uptake in Eastern Oslo, Norway

“…Income was divided into 9 deciles: Below 200, 200–299, 300–399, 400–499, 500–599, 600–699, 700–799, 800–999, and over 1000 (Thousand Norwegian Kroner), with the possibility to answer “Do not wish to answer”. The EU considers people with a pay below 2/3 of the median pay of fulltime workers to be low paid 2017 [ 19 ]. Considering the median pay in the dataset is the 500-599 decile, we divide between 0 and 399 “Low-income” and 400 < “Above-low-income”.…”

Welfare states as lifecycle redistribution machines: Decomposing the roles of age and socio-economic status shows that European tax-and-benefit systems primarily redistribute across age groups

“…But similar decomposition analyses using access to welfare benefits, taxes, and the resulting net welfare benefits as their dependent variables, as we do here, have to our best knowledge not been attempted. Many studies hold some measure of inequality or poverty as the dependent variable and separate the effects of various components of the welfare state (e.g., [ 48 ]), but here we are interested in keeping the incidence of taxes or transfers on the left-hand side of the equation. There are large bodies of empirical research on transfer incidence by income, age, household type, or other individual characteristics, but the overwhelming majority are uni -dimensional, measuring the effect of a single explanatory variable.…”