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Antipoverty Effects of Various Social Transfers and Income Taxes Across Countries

Author

Listed:
  • Koen Caminada

    (Leiden University and Netspar)

  • Kees Goudswaard

    (Leiden University and Netspar)

  • Chen Wang

    (Shanghai University of Finance and Economics and Leiden University)

  • Jinxian Wang

    (Central South University China and Leiden University)

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 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%).

Suggested Citation

  • Koen Caminada & Kees Goudswaard & Chen Wang & Jinxian Wang, 2021. "Antipoverty Effects of Various Social Transfers and Income Taxes Across Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 154(3), pages 1055-1076, April.
    • Handle: RePEc:spr:soinre:v:154:y:2021:i:3:d:10.1007_s11205-020-02572-9
    DOI: 10.1007/s11205-020-02572-9
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    References listed on IDEAS

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    Cited by:

    1. Koen Caminada & Kees Goudswaard & Qingqi Liu & Chen Wang & Jinxian Wang, 2024. "Determinants of Elderly Poverty in 21 European Countries, 1995-2022," LIS Working papers 882, LIS Cross-National Data Center in Luxembourg.
    2. Oliver Hümbelin & Lukas Hobi & Robert Fluder, 2021. "Rich Cities, Poor Countryside? Social Structure of the Poor and Poverty Risks in Urban and Rural Places in an Affluent Country. An Administrative Data based Analysis using Random Forest," University of Bern Social Sciences Working Papers 40, University of Bern, Department of Social Sciences, revised 10 Nov 2021.

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    More about this item

    Keywords

    Welfare states; Social income transfers; Income poverty; LIS;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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