Work, Family or State? From wage inequalities to standard of living inequalities and inwork poverty in a European cross-country perspective

Our aim is to explore how wages inequalities translate into standard of living inequalities in different European countries. Wage inequalities are measured at the individual level. They can be increased or reduced by two institutions: the household and the tax-benefit system. Standards of living are therefore defined at the intersection of three institutions: the labour market, the family and the state (through social transfers). We propose a new methodology to distinguish the impact of these three institutions on standard of living inequalities. An empirical application is conducted for the employed population in different European countries with a focus on France, Spain, the United Kingdom, Germany, Sweden and Poland. Results are in line with expectations except for Germany, which does not conform to expectations for a corporatist regime.