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The redistributive effects of tax-benefit systems revisited: improving policy analysis through the incorporation of wealth data
The need for more comprehensive and integrated data on individual well-being is widely recognised. In order to identify better measures of economic performance in a complex economy and thus going beyond GDP, Stiglitz, Sen and Fitoussi (2009) recommend to consider income, consumption and wealth and to give more prominence to their joint distribution. New household surveys as those developed as part of the Luxembourg Wealth Study (Jäntti et al. 2013) and the Eurosystem Household Finance and Consumption Network (HFCS) represent a milestone in the ongoing process to better measure individual well-being. The purpose of this paper is twofold. First, we explore the prospects for using the HFCS dataset as an underlying micro-database for the EU tax-benefit model, EUROMOD, in six EU countries. Second, we discuss the expansion of new policy domains introduced into the EUROMOD simulations such as wealth taxation, incentives for wealth accumulation and asset tests determining benefit eligibility which allow us to revisit the redistributive effects of the tax-benefit systems across Europe.
Francesco Figari is Associate Professor of Public Finance at the University of Insubria (Italy). Previously he has been Research Fellow at ISER University of Essex where currently he is Research Associate. He holds a Master in Public Economics from the University of York and a PhD in Economics from the University of Essex. He has been involved with the development of EUROMOD, the EU-wide tax-benefit model, since 2006, with particular interest on labour supply modelling.
He has been consultant for the European Commission DG-EMPL, EU JRC IPTS, OECD, United Nation, Statistics Norway and World Bank Institute. He has published in international journals in the fields of poverty, taxation and European welfare systems. His research focuses on the analysis of the redistributive effects of public policies, the behavioural impacts of policy changes, the determinants of multiple deprivation and, more recently, the welfare resilience to the economic crisis across Europe.
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