The Redistributive Effect of Social Transfer Programmes and Taxes: A Decomposition Across Countries

22 Pages Posted: 4 Jul 2012

See all articles by Chen Wang

Chen Wang

Leiden University - Department of Economics; Leiden University

Koen Caminada

Leiden Law School - Department of Economics

Kees Goudswaard

Leiden Law School - Department of Economics

Date Written: July‐September 2012

Abstract

The aim of this article is to offer detailed information of the redistributive impact of social transfer programmes and taxes in 28 Member countries of the Organisation for Economic Co‐operation and Development, employing data that have been computed from the Luxembourg Income Study's micro‐level database. We find that welfare states on average reduce inequality by 35 per cent. Social benefits have a much stronger redistributive impact than taxes. As far as social programmes are concerned, public pensions account for the largest reduction in income inequality, although the pattern is diverse across countries. To a lesser extent, social assistance, disability and family benefits also contribute to smaller income disparities.

Keywords: income redistribution, benefit, taxation, welfare state, OECD

Suggested Citation

Wang, Chen and Caminada, Koen and Goudswaard, Kees, The Redistributive Effect of Social Transfer Programmes and Taxes: A Decomposition Across Countries (July‐September 2012). International Social Security Review, Vol. 65, Issue 3, pp. 27-48, 2012, Available at SSRN: https://ssrn.com/abstract=2100246 or http://dx.doi.org/10.1111/j.1468-246X.2012.01435.x

Chen Wang

Leiden University - Department of Economics ( email )

Steenschuur 25 PO Box 9520
Leiden, 2300 RA
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HOME PAGE: http://law.leiden.edu/organisation/taxlawandeconomics/economics/staff/wang.html

Leiden University ( email )

Postbus 9500
Leiden, Zuid Holland 2300 RA
Netherlands

Koen Caminada

Leiden Law School - Department of Economics ( email )

P.O. Box 9520
2300 RA Leiden, NL-2300RA
Netherlands
++31715277858 (Phone)

HOME PAGE: http://www.law.leiden.edu/organisation/taxlawandeconomics/economics/staff/caminada.html

Kees Goudswaard

Leiden Law School - Department of Economics ( email )

P.O. Box 9520
2300 RA Leiden, NL-2300RA
Netherlands

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