Antipoverty Effects of Various Social Transfers and Income Taxes Across Countries

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....

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Bibliographic Details
Published inSocial indicators research Vol. 154; no. 3; pp. 1055 - 1076
Main Authors Caminada, Koen, Goudswaard, Kees, Wang, Chen, Wang, Jinxian
Format Journal Article
LanguageEnglish
Published Dordrecht Springer Netherlands 01.04.2021
Springer Nature B.V
Subjects
Disability
Disposable income
Human Geography
Income
Income taxes
Microeconomics
Original Research
Poverty
Public Health
Quality of Life Research
Social programs
Social Sciences
Sociology
Taxation
Unemployment
Welfare
Income poverty
LIS
H53
H55
I32
Welfare states
Social income transfers
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Summary: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%).
ISSN:0303-8300
1573-0921
DOI:10.1007/s11205-020-02572-9