Fiscal Redistribution in Comparative Perspective: Recent Evidence from the Luxembourg Income Study (LIS) Data Centre

Has the redistributive effect of social transfers and taxes changed over time across countries?

“…Occupational and private pensions are not redistributive programmes per se; although they too have a significant effect on redistribution when pre‐tax‐transfer inequality and post‐tax‐transfer inequality are measured at one moment in time, particularly among the elderly (Been et al, ). In this study, we pragmatically follow the LIS Household Income Variables List: occupational and private pensions are earmarked and treated as social security transfers (see also Jesuit and Mahler, ).…”

“…One of the main driving forces behind disposable income distribution is the reduction of inequality through the tax‐transfer system (Atkinson and Brandolini, ; Smeeding, ). The overall redistributive effect can be divided into redistribution by transfers and by income taxes, but can also be detailed more specifically (Ferrarini and Nelson, ; Jesuit and Mahler, , ; Wang, Caminada and Goudswaard, ). In the middle of the first decade of this millennium, the average redistributive effect achieved by public cash transfers was twice as large as that achieved through household taxes.…”

Income Inequality and Fiscal Redistribution in 31 Countries After the Crisis

“…In countries that were hit hard by the crisis, like Greece, Spain and Portugal, redistribution has increased, despite fiscal consolidation measures, because most social transfers, e.g., unemployment benefits work as automatic stabilizers, and their purpose is to increase in the times of economic downturn. Jesuit & Mahler (2017) compare the redistributive effects of old-age pensions and transfers to those of working-age in 20 developed countries between the late 1960s and 2010. They find that there is substantial variation across countries in overall fiscal redistribution.…”

“…Studies that apply tax-benefit instruments sequentially suggest that the redistributive effect of transfers is much more important than taxes (e.g. Jesuit & Mahler, 2017;Mahler & Jesuit, 2006;Wang et al, 2012 and2014). Few other studies comparing the redistributive effects of benefits and taxes simultaneously point in the same direction (e.g.…”

“…We employ a budget incidence simulation model to investigate to what extent several social transfers and income taxes reduce income inequality in 31 countries. Other recent studies in the field, Jesuit & Mahler (2017) and Causa & Hermansen (2017), analyze the trend of income inequality and fiscal redistribution. This paper is a cross country comparison at one moment in time for as many countries as possible and for the most recent data year available.…”