Universität zu Köln

Bargain, Olivier, Dolls, Mathias, Neumann, Dirk, Peichl, Andreas and Siegloch, Sebastian (2014). Comparing inequality aversion across countries when labor supply responses differ. Int. Tax Public Financ., 21 (5). S. 845 - 874. DORDRECHT: SPRINGER. ISSN 1573-6970

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Abstract

We analyze to which extent social inequality aversion differs across nations when controlling for actual country differences in labor supply responses. Towards this aim, we estimate labor supply elasticities at both extensive and intensive margins for 17 EU countries and the US. Using the same data, inequality aversion is measured as the degree of redistribution implicit in current tax-benefit systems, when these systems are deemed optimal. We find relatively small differences in labor supply elasticities across countries. However, this changes the cross-country ranking in inequality aversion compared to scenarios following the standard approach of using uniform elasticities. Differences in redistributive views are significant between three groups of nations. Labor supply responses are systematically larger at the extensive margin and often larger for the lowest earnings groups, exacerbating the implicit Rawlsian views for countries with traditional social assistance programs. Given the possibility that labor supply responsiveness was underestimated at the time these programs were implemented, we show that such wrong perceptions would lead to less pronounced and much more similar levels of inequality aversion.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Bargain, Olivier UNSPECIFIED UNSPECIFIED UNSPECIFIED Dolls, Mathias UNSPECIFIED UNSPECIFIED UNSPECIFIED Neumann, Dirk UNSPECIFIED UNSPECIFIED UNSPECIFIED Peichl, Andreas UNSPECIFIED UNSPECIFIED UNSPECIFIED Siegloch, Sebastian UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-427747
DOI:	10.1007/s10797-013-9277-9
Journal or Publication Title:	Int. Tax Public Financ.
Volume:	21
Number:	5
Page Range:	S. 845 - 874
Date:	2014
Publisher:	SPRINGER
Place of Publication:	DORDRECHT
ISSN:	1573-6970
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language SOCIAL PREFERENCES; INCOME TAXATION; REDISTRIBUTION; REFORM Multiple languages Economics Multiple languages
URI:	http://kups.ub.uni-koeln.de/id/eprint/42774