TY - JOUR
T1 - The Distributive Impact of the Luxembourg Tax-Benefit System
T2 - A More Comprehensive Measurement
AU - Vergnat, Vincent
AU - D’Ambrosio, Conchita
AU - Liégeois, Philippe
N1 - Funding Information:
This work is part of the 2018–2020 project “Gathering expertise for a more comprehensive view of income components in Luxembourg,” in collaboration with the Luxembourg Institute of Socio-Economic Research (LISER), the University of Luxembourg, and the Chambre des Salariés du Luxembourg (CSL). The results presented here are based on EUROMOD version I1.0+. EUROMOD is maintained, developed, and managed by the Institute for Social and Economic Research (ISER) at the University of Essex, in collaboration with national teams from the EU member states. We are indebted to the many people who have contributed to the development of EUROMOD. The process of extending and updating EUROMOD is financially supported by the European Union Programme for Employment and Social Innovation “EaSI” (2014–2020). We make use of microdata from the EU Statistics on Income and Living Conditions, made available by Eurostat (RPP 213/2019-EU-SILC) and the National Household Budget Survey data, made available by the Luxembourg statistical office (STATEC).
PY - 2022/8/7
Y1 - 2022/8/7
N2 - This article studies the distribution of income in Luxembourg by integrating two aspects that have been previously neglected: indirect taxation and in-kind transfers. The integration of the latter is essential in Luxembourg, the country with the highest public expenditure per capita in the Organisation for Economic Co-operation and Development (OECD). These issues have been understudied because of some methodological challenges, including the lack of data containing all the necessary information for this type of analysis. However, with the EUROMOD microsimulation model, different data sources, and imputation methods, we are able to obtain a more complete view of the income distribution in Luxembourg. We find that, as in many developed countries, indirect taxes are regressive. On the other hand, in-kind transfers play an important role in reducing income inequality, in particular through education and health services.
AB - This article studies the distribution of income in Luxembourg by integrating two aspects that have been previously neglected: indirect taxation and in-kind transfers. The integration of the latter is essential in Luxembourg, the country with the highest public expenditure per capita in the Organisation for Economic Co-operation and Development (OECD). These issues have been understudied because of some methodological challenges, including the lack of data containing all the necessary information for this type of analysis. However, with the EUROMOD microsimulation model, different data sources, and imputation methods, we are able to obtain a more complete view of the income distribution in Luxembourg. We find that, as in many developed countries, indirect taxes are regressive. On the other hand, in-kind transfers play an important role in reducing income inequality, in particular through education and health services.
KW - microsimulation
KW - inequality
KW - indirect taxation
KW - income distribution
KW - in-kind transfers
UR - http://www.scopus.com/inward/record.url?scp=85135446970&partnerID=8YFLogxK
U2 - 10.1177/10911421221113842
DO - 10.1177/10911421221113842
M3 - Article
AN - SCOPUS:85135446970
SN - 1091-1421
VL - 50
SP - 436
EP - 483
JO - Public Finance Review
JF - Public Finance Review
IS - 4
ER -