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Social Indicators Research

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27-11-2020 | Original Research

Antipoverty Effects of Various Social Transfers and Income Taxes Across Countries

Authors: Koen Caminada, Kees Goudswaard, Chen Wang, Jinxian Wang

Published in: Social Indicators Research | Issue 3/2021

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Abstract

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%).

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Title: Antipoverty Effects of Various Social Transfers and Income Taxes Across Countries
Authors: Koen Caminada
Kees Goudswaard
Chen Wang
Jinxian Wang
Publication date: 27-11-2020
Publisher: Springer Netherlands
Published in: Social Indicators Research / Issue 3/2021
Print ISSN: 0303-8300
Electronic ISSN: 1573-0921
DOI: https://doi.org/10.1007/s11205-020-02572-9

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