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Documents de travail du Département des Affaires économiques de l'OCDE

Documents de travail du Département des affaires économiques de l’OCDE recouvrant toutes les activités de ce département : conjoncture économique, analyse politique et projections ; politique fiscale, dépenses publiques et fiscalité ; questions structurelles dont le vieillissement, la croissance et la productivité, la migration, l’environnement, le capital humain, le logement, les échanges et les investissements, les marchés de l’emploi, la réforme réglementaire, la concurrence, la santé et d’autres thèmes.

Anglais, Français

Income redistribution through taxes and transfers across OECD countries

This paper produces a comprehensive assessment of income redistribution to the working-age population, covering OECD countries over the last two decades. Redistribution is quantified as the relative reduction in market income inequality achieved by personal income taxes, employees’ social security contributions and cash transfers, based on household-level micro data. A detailed decomposition analysis uncovers the respective roles of size, tax progressivity and transfer targeting for overall redistribution, the respective role of various categories of transfers for transfer redistribution; as well as redistribution for various income groups. The paper shows a widespread decline in redistribution across the OECD, both on average and in the majority of countries for which data going back to the mid-1990s are available. This was primarily associated with a decline in cash transfer redistribution while personal income taxes played a less important and more heterogeneous role across countries. In turn, the decline in the redistributive effect of cash transfers reflected a decline in their size and in particular by less redistributive insurance transfers. In some countries, this was mitigated by more redistributive assistance transfers but the resulting increase in the targeting of total transfers was not sufficient to prevent transfer redistribution from declining.

Anglais

Mots-clés: transfers, taxes, progressivity, income inequality, redistribution
JEL: I38: Health, Education, and Welfare / Welfare, Well-Being, and Poverty / Welfare, Well-Being, and Poverty: Government Policy; Provision and Effects of Welfare Programs; H23: Public Economics / Taxation, Subsidies, and Revenue / Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies; H53: Public Economics / National Government Expenditures and Related Policies / Government Expenditures and Welfare Programs; D31: Microeconomics / Distribution / Personal Income, Wealth, and Their Distributions
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