The Distributional Impact of in Kind Public Benefits in European Countries

36 Pages Posted: 1 Dec 2009

See all articles by Alari Paulus

Alari Paulus

University of Essex - Institute for Social and Economic Research (ISER)

Holly Sutherland

University of Essex - Institute for Social and Economic Research (ISER)

Panos Tsakloglou

Athens University of Economics and Business - Department of International and European Economic Studies; IZA Institute of Labor Economics

Abstract

International comparisons of inequality based on measures of disposable income may not be valid if the size and incidence of publicly-provided in kind benefits differ across the countries considered. The benefits that are financed by taxation in one country may need to be purchased out of disposable income in another. We estimate the size and incidence of in kind or "non cash" benefits from public housing subsidies, education and health care for five European countries using comparable methods and data. Inequality in the augmented income measure is dramatically lower than in disposable income, with the effects of the three components varying in importance across countries. Adapting equivalence scales to take proper account of differences in needs for health care and education across population members reduces the scale of the effect, but does not eliminate it.

Keywords: inequality, in kind transfers, cross-national comparisons

JEL Classification: I38

Suggested Citation

Paulus, Alari and Sutherland, Holly and Tsakloglou, Panogiotis, The Distributional Impact of in Kind Public Benefits in European Countries. IZA Discussion Paper No. 4581, Available at SSRN: https://ssrn.com/abstract=1515128

Alari Paulus (Contact Author)

University of Essex - Institute for Social and Economic Research (ISER) ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Holly Sutherland

University of Essex - Institute for Social and Economic Research (ISER) ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Panogiotis Tsakloglou

Athens University of Economics and Business - Department of International and European Economic Studies ( email )

GR-10434 Athens
Greece
+301-8203195 (Phone)
+301-8214122 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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