Decomposing Redistributive and Reranking Effects to Reveal Contributions of Taxes and Benefits

By: Urban, Ivica.

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BookSeries: wiiw Balkan Observatory Working Papers: 85Publisher: Wien : Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw), 2010Subject(s): redistributive effect | reranking effect | taxes | benefitsClassification: D63 | H22 | H23 Online resources: Click here to access online Summary: New decompositions of redistributive effects are developed, revealing the relative contributions of different tax and benefit instruments. The methodology uses a “micro-approach” in the study of income inequality, where different indicators are first calculated for pairs of income units, and then aggregated to the population level. This approach is much more suitable for scrutinizing various income transitions emerging from fiscal activities than the usual apparatus of Lorenz and concentration curves. Emerging within this framework are also the concepts of fiscal deprivation, distance narrowing deprivation from reranking; their connections with widely known indices of redistributive, vertical and reranking effects are established. The methodology is applied in an analysis of the Croatian system of direct taxes and cash social benefits.

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Item type	Current library	Call number	Status	Date due	Barcode
Paper	WIIW Library	85 (Browse shelf(Opens below))	Available		1000010003208

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New decompositions of redistributive effects are developed, revealing the relative contributions of different tax and benefit instruments. The methodology uses a “micro-approach” in the study of income inequality, where different indicators are first calculated for pairs of income units, and then aggregated to the population level. This approach is much more suitable for scrutinizing various income transitions emerging from fiscal activities than the usual apparatus of Lorenz and concentration curves. Emerging within this framework are also the concepts of fiscal deprivation, distance narrowing deprivation from reranking; their connections with widely known indices of redistributive, vertical and reranking effects are established. The methodology is applied in an analysis of the Croatian system of direct taxes and cash social benefits.

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