Tax-benefit Systems and Gender Gap. An Across-Europe Study

Important international organizations, such as the United Nations or the European Commission, have at the core of their agendas the objective of achieving gender equality in order to ensure fair social development through equity and, ultimately, stable economic growth. Our main objective is to broaden the perspective from which the gender pay gap is analysed by considering gender differences in disposable income, the gender income gap. We introduce the idea that public intervention through tax-benefit policies can contribute to a reduction in the gender income gap as well as providing empirical evidence that a decrease in this gap fosters the reduction of social inequality in general. The aim is to quantify the effect that each policy of the tax-benefit system has on the gender income gap. An analysis is done for all countries of the European Union. The database used is EUROMOD, a tax-benefit microsimulation model for the European Union. We have analysed how gender income gap changes by country, by type of benefit (contributory vs. non-contributory), by policy and according to sociodemographic characteristics. In addition, we aim to determine if the reduction of the gender income gap is related to a reduction in the levels of inequality in European countries. In short, the results obtained provide empirical evidence that public intervention through tax-benefit policies can contribute to a reduction in the gender income gap. They also endorse the idea that social inequality reduces with a decrease in the gender income gap.