Reference : Accounting for Differences in Income Inequality across Countries: Ireland and the Uni...
E-prints/Working papers : Already available on another site
Social & behavioral sciences, psychology : Sociology & social sciences
Business & economic sciences : Social economics
Computational Sciences
http://hdl.handle.net/10993/35064
Accounting for Differences in Income Inequality across Countries: Ireland and the United Kingdom
English
Sologon, Denisa M. [Luxembourg Institute of Socio-Economic Research - LISER]
Van Kerm, Philippe mailto [University of Luxembourg > Faculty of Language and Literature, Humanities, Arts and Education (FLSHASE) > Integrative Research Unit: Social and Individual Development (INSIDE) > ; Luxembourg Institute of Socio-Economic Research - LISER]
Li, Jinjing [Canberra University]
O'Donoghue, Cathal [National University of Ireland Galway]
2018
Luxembourg Institute of Socio-Economic Research
No
Esch-sur-Alzette
Luxembourg
[en] This paper proposes 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 prices and market returns, and demographic composition in accounting for differences in income inequality across countries. Building upon EUROMOD (the European tax-benefit calculator) and its harmonized datasets, the model is portable and can be implemented for any cross-country comparisons within the EU. 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 roughly half 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.
Fonds National de la Recherche - FnR
http://hdl.handle.net/10993/35064
http://d.repec.org/n?u=RePEc:irs:cepswp:2018-01
http://d.repec.org/n?u=RePEc:irs:cepswp:2018-01

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