Household decisions and equivalence scales

Equivalence scales, Household decision rule, Economies of size, D31, D63,

Equivalence scales and inequality

At the heart of any distributional analysis there is the problem of allowing for differences in people's non-income characteristics. We examine the role of standard equivalence scales in distributional comparisons and the welfare implications of the basis for constructing equivalence scales. We consider the use of alternative approaches that do not require the specification of a single scale and implement one of these in practical comparison of Spain and the UK

Income effects of divorce in families with dependent children

Marital dissolution, Income changes, Child custody, J12, D31, I38,

Trends in the UK Income Distribution

This paper reviews trends over the last three decades in the personal distribution of income in the UK. The first section of the paper documents the trends from a number of different perspectives (inequality, poverty and real income growth). Later sections explore the causes of the large increase in income inequality in the UK between the late 1970s and the beginning of the 1990s and the halt in the increase over the subsequent five years

Identifying tax implicit equivalence scales

This is a post-peer-review, pre-copyedit version of an article published in Journal of Economic Inequality. The final authenticated version is available online at: https://doi.org/10.1007/s10888-017-9354-x© 2017, Springer Science+Business Media New York. This paper describes a simple and tractable method for identifying equivalence scales that reflect the value judgements implicit in a tax and transfer system. The approach depends on two identifying assumptions and a functional description for transfer payments that can be estimated using common publicly available data sources. We use this approach to evaluate tax implicit equivalence scales for the tax-transfer systems of 12 European countries that applied in 2012. Cross-country averages for the tax implicit scales generate a surprising set of stylised results: at low incomes, each additional household member increases the tax implicit scale by approximately 0.5, relative to 1.0 for the first adult; at high incomes, the average tax implicit scales describe variation that is remarkably similar to the modified OECD scale. However, substantial cross-country variation underlies these average scales, suggesting important differences in value judgements implicit in the respective tax-transfer systems; differences that can otherwise be difficult to discern when systems are complex and opaque