Carbon uptake by European agricultural land is variable, and in many regions could be increased : Evidence from remote sensing, yield statistics and models of potential productivity

We acknowledge the free data access provided by EUROSTAT http://ec.europa.eu/eurostat, and by EarthStat http://www.earthstat.org/data-download/. For their roles in producing, coordinating, and making available the ISIMIP model output, we acknowledge the following modeling groups (GEPIC: Christian Folberth, International Institute for Applied Systems Analysis, Austria; LPJmL: Christoph Müller, Potsdam-Institute for Climate Impact Research, Germany; PEPIC: Wenfeng Liu, Swiss Federal Institute of Aquatic Science and Technology, Switzerland) and the ISIMIP cross sectoral science team. The input of P.S. contributes to the EU H2020-funded project 776810 “VERIFY”.Peer reviewedPostprintPostprin

Tax-Benefit Systems in Europe and the US: Between Equity and Efficiency

Whether observed differences in redistributive policies across countries are the result of differences in social preferences or efficiency constraints is an important question that paves the debate about the optimality of welfare regimes. To shed new light on this question, we estimate labor supply elasticities on microdata and adopt an inverted optimal tax approach to characterize the redistributive preferences embodied in the welfare systems of 17 EU countries and the US. Implicit social welfare functions are broadly compatible with the fi…ction of an optimizing Paretian social planner. Some exceptions due to generous demogrant transfers are consistent with the ignorance of behavioral responses by some European governments and are partly corrected by recent policy developments. Heterogeneity in leisure-consumption preferences somewhat affect the international comparison in degrees of revealed inequality aversion, but differences in social preferences are signifi…cant only between broad groups of countries.Social preferences, redistribution, optimal income taxation, labor supply

Tax-Benefit Systems in Europe and the US: Between Equity and Efficiency

Whether observed differences in redistributive policies across countries are the result of differences in social preferences or efficiency constraints is an important question that paves the debate about the optimality of welfare regimes. To shed new light on this question, we estimate labor supply elasticities on microdata and adopt an inverted optimal tax approach to characterize the redistributive preferences embodied in the welfare systems of 17 EU countries and the US. Implicit social welfare functions are broadly compatible with the fiction of an optimizing Paretian social planner. Some exceptions due to generous demogrant transfers are consistent with the ignorance of behavioral responses by some European governments and are partly corrected by recent policy developments. Heterogeneity in leisure-consumption preferences somewhat affect the international comparison in degrees of revealed inequality aversion, but differences in social preferences are significant only between broad groups of countries.social preferences, redistribution, optimal income taxation, labor supply

Tax-Benefit Systems in Europe and the US: Between Equity and Efficiency

Whether observed di¤erences in redistributive policies across countries are the result of di¤erences in social preferences or e¢ ciency constraints is an important question that paves the debate about the optimality of welfare regimes. To shed new light on this question, we estimate labor supply elasticities on microdata and adopt an inverted optimal tax approach to characterize the redistributive preferences embodied in the welfare systems of 17 EU countries and the US. Implicit social welfare functions are broadly compatible with the ?ction of an optimizing Paretian social planner. Some exceptions due to generous demogrant transfers are consistent with the ignorance of behavioral responses by some European governments and are partly corrected by recent policy developments. Heterogeneity in leisure-consumption preferences somewhat a¤ect the international comparison in degrees of revealed inequality aversion, but di¤erences in social preferences are signi?cant only between broad groups of countries.social preferences; redistribution; optimal income taxation; labor supply

Welfare, Labor Supply and Heterogeneous Preferences: Evidence for Europe and the US

Following the report of the Stiglitz Commission, measuring and comparing well-being across countries has gained renewed interest. Yet, analyses that go beyond income and incorporate non-market dimensions of welfare most often rely on the assumption of identical preferences to avoid the difficulties related to interpersonal comparisons. In this paper, we suggest an international comparison based on individual welfare rankings that fully retain preference heterogeneity. Focusing on the consumption-leisure trade-off, we estimate discrete choice labor supply models using harmonized microdata for 11 European countries and the US. We retrieve preference heterogeneity within and across countries and analyze several welfare criteria which take into account that differences in income are partly due to differences in tastes. The resulting welfare rankings clearly depend on the normative treatment of preference heterogeneity with alternative metrics. We show that these differences can indeed be explained by estimated preference heterogeneity across countries – rather than demographic composition.welfare measures, preference heterogeneity, labor supply, Beyond GDP

Tax policy and income inequality in the U.S., 1978—2009: A decomposition approach

We assess the effects of U.S. tax policy reforms on inequality by applying a new decomposition method that allows us to disentangle mechanical effects due to changes in pre-tax incomes from direct effects of policy reforms. While tax reforms implemented under Democrat administrations, in particular the EITC reforms in the 1990s and the ARRA in 2009, had an equalizing effect at the lower half of the distribution, the disequalizing effects of Republican reforms are due to tax cuts for high-income families. As a consequence of partisan politics, overall policy effects almost cancel out over the whole time period.Tax policy, Inequality, Redistribution, Political Economy, Great Recession

Tax Policy and Income Inequality in the U.S., 1978-2009: A Decomposition Approach

We assess the effects of U.S. tax policy reforms on inequality by applying a new decomposition method that allows us to disentangle mechanical effects due to changes in pre-tax incomes from direct effects of policy reforms. While tax reforms implemented under Democrat administrations, in particular the EITC reforms in the 1990s and the ARRA in 2009, had an equalizing effect at the lower half of the distribution, the disequalizing effects of Republican reforms are due to tax cuts for high-income families. As a consequence of partisan politics, overall policy effects almost cancel out over the whole time period.political economy, redistribution, inequality, tax policy, Great Recession

An unemployment insurance scheme for the euro area? : a comparison of different alternatives using micro data

We analyze different alternatives how a common unemployment insurance system for the euro area (EA) could be designed and assess their effectiveness to act as an insurance device in the presence of asymmetric macroeconomic shocks. Running counterfactual simulations based on micro data for the period 2000-13, we highlight and quantify the trade-off between automatic stabilization e¤ects and the degree of cross-country transfers. In the baseline, we focus on a non-contingent scheme covering short-term unemployment and find that it would have absorbed a significant fraction of the un- employment shock in the recent crisis. However, 5 member states of the EA18 would have been either a permanent net contributor or net recipient. Our results suggest that claw-back mechanisms and contingent benefits could limit the degree of cross-country redistribution, but might reduce desired insurance e¤ects. We also discuss moral haz- ard issues at the level of individuals, the administration and economic policy

Fiscal integration in the eurozone : economic effects of two key scenarios

The 2008-09 crisis has shown that some euro area member countries were unable to sufficiently stabilize their economies which has given rise to a debate about deeper fiscal integration in Europe. In this paper, we analyze the redistributive and stabilizing effects of two scenarios of fiscal integration in the Eurozone, namely the introduction of i) a joint tax and transfer system that replaces 10 per cent of national systems and ii) a system of fiscal equalization that equalizes 10 per cent of differences in taxing capacity. Based on the European tax-benefit calculator EUROMOD and representative household micro data for the current 17 euro area member states, our conceptual experiment shows that a joint tax and transfer system would only lead to moderate gains in terms of stabilization while redistribution would flow especially towards the Eastern European member states. In contrast, a fiscal equalization mechanism that redistributes revenues across countries could even lead to destabilizing effects