@techreport{1f2b9637323545af849f1d0d1be27505,
title = "Accounting for Differences in Income Inequality across Countries: Ireland and the United Kingdom",
abstract = "This paper proposes a framework for studying international differences in the distribution of household income. Integrating micro-econometric and micro-simulation approaches in a decomposition analysis it quantifies the role of tax-benefit systems, employment and occupational structures, labour prices and market returns, and demographic composition in accounting for differences in income inequality across countries. Building upon EUROMOD (the European tax-benefit calculator) and its harmonized datasets, the model is portable and can be implemented for any cross-country comparisons within the EU. An application to the UK and Ireland?two countries that have much in common while displaying different levels of inequality?shows that differences in tax-benefit rules between the two countries account for roughly half of the observed difference in disposable household income inequality. Demographic differences play negligible roles. The Irish tax-benefit system is more redistributive than UK's due to a higher tax progressivity and higher average transfer rates. These are largely attributable to policy parameter differences, but also to differences in pre-tax, pre-transfer income distributions.",
keywords = "cross-national comparisons, decompositions, income inequality, microsimulation, tax and transfer policy",
author = "Denisa Sologon and {Van Kerm}, Philippe and Jinjing Li and Cathal O'Donoghue",
year = "2018",
language = "English",
series = "Working Papers",
publisher = "LISER",
number = "2018-01",
address = "Luxembourg",
type = "WorkingPaper",
institution = "LISER",
}