Inequality Measurement and Tax/Transfer Policy
CESifo, Munich, 2020
CESifo Working Paper No. 8378
We provide a critique of the standard methodology which bases welfare comparisons between households on deflating household income and consumption by an equivalence scale. We argue that this leads to support for tax/transfer policies that significantly disadvantage low to middle in-come households and women as second earners. We base the critique both on a theoretical model of the family household and a detailed analysis of Australian income and employment data.
Public Finance
Labour Markets