Non-Cash Benefits and the Distribution of Economic Welfare

32 Pages Posted: 25 Jan 2009

See all articles by Tim Callan

Tim Callan

Economic and Social Research Institute, Ireland; IZA Institute of Labor Economics

Claire Keane

Economic and Social Research Institute, Ireland

Abstract

Non-cash benefits can have substantial effects on the distribution of economic welfare. Standard approaches to the inclusion of non-cash benefits in broader measures of resources have failed to take adequate account of the pattern of needs associated with the greater use of health and education services. Our results, for Ireland in the year 2000, show that it is possible to derive more appropriate measures of total resources than have been derived using standard methods. The results indicate that the greatest impact comes from the inclusion of imputed rent for owner occupation as part of the resource measure. When this is done, the rate of "resource poverty" for older people is substantially reduced, in line with results which use indicators of standard of living as well as cash incomes ("consistent poverty").

Keywords: non-cash benefits, income distribution

JEL Classification: D31, H23, I31, I32

Suggested Citation

Callan, Tim and Keane, Claire, Non-Cash Benefits and the Distribution of Economic Welfare. IZA Discussion Paper No. 3954, Available at SSRN: https://ssrn.com/abstract=1332595

Tim Callan (Contact Author)

Economic and Social Research Institute, Ireland ( email )

4 Burlington Road
Dublin 4
Republic of Ireland

IZA Institute of Labor Economics ( email )

Bonn, D-53072
Germany

Claire Keane

Economic and Social Research Institute, Ireland ( email )

Whitaker Square
Sir John Rogerson's Quay
Dublin 2
United States

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