Means-tested transfer schemes in Europe and elsewhere tend to include not only income tests but a... more Means-tested transfer schemes in Europe and elsewhere tend to include not only income tests but also asset tests of various sorts. The role of asset tests in minimum income protection provisions has been extensively researched in the Anglo-Saxon context. Far fewer authors have assessed the role of asset tests on social policy in a continental European context. Although asset tests may be useful in singling out the more deserving of the poor, we know relatively little of their actual impact on eligibility and social outcomes in European welfare states. This paper looks at the prevalence and design of asset tests in European minimum income protection schemes. We distinguish between two main types of asset tests: outright disqualification when assets reach a certain value, versus a more gradual tapering at a fictional rate of return. We then analyse in greater detail how asset tests in Belgium and Germany, as representatives of these two types, affect minimum income protection eligibil...
Taxing wealth has received increased attention in both the academic and political debate, as a wa... more Taxing wealth has received increased attention in both the academic and political debate, as a way to reduce inequality of both income and wealth. However, analytical tools are still underdeveloped when it comes to empirical analyses of different types of wealth-related taxes and policies. New household surveys as those developed as part of the Eurosystem Household Finance and Consumption Survey (HFCS) represent a milestone for this purpose. Yet, distributional analysis of income and wealth requires information on disposable income and wealth which are not available, as the new Eurosystem data includes only gross income values. Moreover, in order to simulate the effects of wealth taxes and (budget neutral) reforms to the current direct taxes a microsimulation model such as EUROMOD is needed. Integrating the HFCS data in EUROMOD makes it possible to assess the effect of different current and hypothetical wealth taxes and policies on the distribution of income and wealth. In this repo...
This paper explores the effects of asset tests in social benefit schemes and more particularly mi... more This paper explores the effects of asset tests in social benefit schemes and more particularly minimum income protection (MIP) schemes. We look at the impact on two important outcomes: eligibility rates and poverty. The role of asset tests has been extensively researched in the Anglo-Saxon context. To our knowledge, however, ours is the first paper that looks at the impact of asset tests in a continental European context, through a comparison of asset tests and their effects in Belgium and Germany. Both countries have quite detailed asset tests within their minimum income protection schemes. Our comparison shows however important differences in the design of these asset tests. They differ in terms of complexity, balance of taxing capital income vs. capital itself and the treatment of real estate. We use the EUROMOD microsimulation model on the HFCS (Household Finance and Consumption Survey) data. The HFCS was explicitly designed to more realistically reflect assets and capital incom...
Over the past decades, social protection systems in Western welfare states have designed new ways... more Over the past decades, social protection systems in Western welfare states have designed new ways to facilitate the reconciliation of work and family life. Often, the new measures were added to existing family policies and family-dependent taxation rules. This has led to heterogeneous policy mixes relating to caring for children, ranging from support of the working mother (e.g. subsidies for child care) to measures that are aimed at compensating parents for self-provided care efforts (e.g. home-care benefits). This heterogeneity entails complex incentive structures that are not a priori clear. Also, the different policy options are far from distributionally neutral. In this paper, we use EUROMOD to model the policy measures of both types (work support and home care support) in place in three European welfare states with very distinct care policy systems: Finland, Belgium and Germany. Using microsimulation techniques we introduce the Finnish policy set in Belgium and Germany. The dis...
The aim of this chapter is to assess different issues related to measuring the social impact of s... more The aim of this chapter is to assess different issues related to measuring the social impact of social investment strategies, and more specifically of publicly provided services. The chapter starts with a short discussion of the role played by services in the social investment strategy, as these services are often considered to be a more appropriate social investment instrument than cash transfers. This is illustrated by discussing the distributive effects of two types of publicly provided services, namely childcare and education. A literature overview is presented of how the employment and inequality effects of these services are measured. Both first-order and second-order effects are considered, thereby also indicating gaps in knowledge for a proper assessment of such services in the framework of social investment.
Means-tested transfer schemes in Europe and elsewhere tend to include not only income tests but a... more Means-tested transfer schemes in Europe and elsewhere tend to include not only income tests but also asset tests of various sorts. The role of asset tests in minimum income protection provisions has been extensively researched in the Anglo-Saxon context. Far fewer authors have assessed the role of asset tests on social policy in a continental European context. Although asset tests may be useful in singling out the more deserving of the poor, we know relatively little of their actual impact on eligibility and social outcomes in European welfare states. This paper looks at the prevalence and design of asset tests in European minimum income protection schemes. We distinguish between two main types of asset tests: outright disqualification when assets reach a certain value, versus a more gradual tapering at a fictional rate of return. We then analyse in greater detail how asset tests in Belgium and Germany, as representatives of these two types, affect minimum income protection eligibil...
Taxing wealth has received increased attention in both the academic and political debate, as a wa... more Taxing wealth has received increased attention in both the academic and political debate, as a way to reduce inequality of both income and wealth. However, analytical tools are still underdeveloped when it comes to empirical analyses of different types of wealth-related taxes and policies. New household surveys as those developed as part of the Eurosystem Household Finance and Consumption Survey (HFCS) represent a milestone for this purpose. Yet, distributional analysis of income and wealth requires information on disposable income and wealth which are not available, as the new Eurosystem data includes only gross income values. Moreover, in order to simulate the effects of wealth taxes and (budget neutral) reforms to the current direct taxes a microsimulation model such as EUROMOD is needed. Integrating the HFCS data in EUROMOD makes it possible to assess the effect of different current and hypothetical wealth taxes and policies on the distribution of income and wealth. In this repo...
This paper explores the effects of asset tests in social benefit schemes and more particularly mi... more This paper explores the effects of asset tests in social benefit schemes and more particularly minimum income protection (MIP) schemes. We look at the impact on two important outcomes: eligibility rates and poverty. The role of asset tests has been extensively researched in the Anglo-Saxon context. To our knowledge, however, ours is the first paper that looks at the impact of asset tests in a continental European context, through a comparison of asset tests and their effects in Belgium and Germany. Both countries have quite detailed asset tests within their minimum income protection schemes. Our comparison shows however important differences in the design of these asset tests. They differ in terms of complexity, balance of taxing capital income vs. capital itself and the treatment of real estate. We use the EUROMOD microsimulation model on the HFCS (Household Finance and Consumption Survey) data. The HFCS was explicitly designed to more realistically reflect assets and capital incom...
Over the past decades, social protection systems in Western welfare states have designed new ways... more Over the past decades, social protection systems in Western welfare states have designed new ways to facilitate the reconciliation of work and family life. Often, the new measures were added to existing family policies and family-dependent taxation rules. This has led to heterogeneous policy mixes relating to caring for children, ranging from support of the working mother (e.g. subsidies for child care) to measures that are aimed at compensating parents for self-provided care efforts (e.g. home-care benefits). This heterogeneity entails complex incentive structures that are not a priori clear. Also, the different policy options are far from distributionally neutral. In this paper, we use EUROMOD to model the policy measures of both types (work support and home care support) in place in three European welfare states with very distinct care policy systems: Finland, Belgium and Germany. Using microsimulation techniques we introduce the Finnish policy set in Belgium and Germany. The dis...
The aim of this chapter is to assess different issues related to measuring the social impact of s... more The aim of this chapter is to assess different issues related to measuring the social impact of social investment strategies, and more specifically of publicly provided services. The chapter starts with a short discussion of the role played by services in the social investment strategy, as these services are often considered to be a more appropriate social investment instrument than cash transfers. This is illustrated by discussing the distributive effects of two types of publicly provided services, namely childcare and education. A literature overview is presented of how the employment and inequality effects of these services are measured. Both first-order and second-order effects are considered, thereby also indicating gaps in knowledge for a proper assessment of such services in the framework of social investment.
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