JRC B2 Seminar: "A new poverty indicator for Europe: The extended headcount ratio" - Tim Goedemé
ABSTRACT:
The methodology currently used to measure poverty in the European Union faces some important limitations. Capturing key aspects of poverty is done using a dashboard of indicators, which often tell conflicting stories. We propose a new income-based measure of poverty for Europe that captures in a consistent way in a single indicator the level of relative poverty, the intensity of poverty, poverty with a threshold anchored in time and a pan-European perspective on poverty. To do so, we work with a recently developed poverty index, the extended headcount ratio (EHC) and derive the relevant poverty lines to apply the index to poverty in Europe. We show empirically that our measure consistently captures the aspects typically monitored using a variety of indicators and yields rankings that seem more aligned with intuitions than those obtained by these individual indicators. According to our measure, Eastern Europe has a much higher level of poverty than Southern Europe, which, in turn, has a considerably higher level of poverty than North-Western Europe. In North-Western Europe, the evolution of our measure over time correlates most strongly with the at-risk-of-poverty rate, while in Southern and Eastern Europe, it correlates most strongly with at-risk-of-poverty with the threshold anchored in time.
SPEAKER:
Tim Goedemé is Senior research fellow of the Herman Deleeck Centre for Social Policy (University of Antwerp), where he directs research on poverty and social protection, and Associate Member of the Institute for New Economic Thinking at the Oxford Martin School (University of Oxford), where he is involved in the ‘Employment, Equity and Growth Programme’. His research topics include the definition and measurement of poverty and human needs in high-income countries, the adequacy and effectiveness of social policies, as well as environmental sustainability and the welfare state. Recently, he became responsible for setting up the research programme of the new Belgian Federal Institute for the protection and promotion of Human Rights.
JRC B2 Seminar: "Wealth Inequality Dynamics in Europe and the United States: Understanding the Determinants" - Clara Martínez-Toledano
Abstract
This paper studies the interaction between the long-term dynamics of aggregate household wealth and the wealth distribution in Europe and the United States. We do so by building the first Distributional Wealth Accounts for Europe, including households’ assets, liabilities, investment flows, and the wealth distribution for most European countries from 1970–2020. We find that although aggregate household wealth to income ratios have followed a similar increasing pattern in both Europe and the United States since 1970, wealth concentration has increased much faster in the United States. Using wealth accumulation decompositions and counterfactual simulations, we show that the weaker rise in labor income inequality and the stronger rise in house prices relative to financial assets in Europe versus the United States seem to explain why Europe has experienced a more moderate rise in wealth concentration since the mid-1980s.
Speaker
Clara Martínez-Toledano is an Assistant Professor of Financial Economics at the Imperial College London, and Wealth Distribution Coordinator at WID.world. Before joining Imperial, she was a Postdoctoral research scholar at Columbia Business School. Her research interests are on household and public finance. Recent work focuses on understanding the determinants of wealth accumulation and wealth inequality dynamics within and across countries.
JRC B2 Seminar: "How important are the unit of analysis and equivalence scales when measuring income poverty and inequality? Evidence from Ireland" - Mark Regan
Abstract
We analyse the effect of varying equivalization scales and income-sharing units (households, tax-units and benefit-units) on inequality and poverty statistics using Irish microdata. We find that benchmark equivalence scales result in substantial variation in the degree of income poverty estimated at the household level, particularly for young children and the elderly. We test multiple permutations of child and adult weights in a set of hypothetical equivalence scales. Our simulation results show that over a range of commonly observed adult-child equivalence weights –0.5 to 0.7 for adults and 0.3 to 0.5 for children, Irish income poverty rates in 2019 ranged from 15.0 per cent to 19.5 per cent– most of this variation is attributable to changes in the adult weight. Inequality statistics tend to be less sensitive to the choice of equivalence scale but are sensitive to the choice of income-sharing unit. At the household level, the Gini coefficient varies between 0.29 and 0.32. At the tax-/benefit-unit level the range is elevated, with the Gini remaining stable over time but between 0.33 and 0.35. Other inequality metrics, such as the p90p10 ratio, exhibit increased volatility over the business cycle at sub-household unit levels.
Speaker
Mark Regan is a researcher at the Economic and Social Research Institute (Dublin, Ireland) and is affiliated to Trinity College Dublin. He recently completed a PhD in Economics at University College Dublin and previously lectured in Trinity College Dublin. His research interests include tax-benefit policy analysis and labour market scarring.
Theano Kakoulidou is a researcher at the Economic and Social Research Institute (Dublin, Ireland) and she is also affiliated to Trinity College Dublin. Before that she has worked as a special advisor to the Greek Minister of Labour as well as members of the Hellenic Parliament, while finishing her PhD at the Athens University of Economics and Business. Her research interests include labour, public and welfare economics.
JRC B2 Seminar: "Trends in Inequality of Opportunity in health over the life cycle: the role of early-life conditions" - Matija Kovacic
Abstract
This paper explores the evolution of inequality of opportunity in the prevalence of chronic diseases along the life cycle and across different birth cohorts for individuals aged 50 or older and residing in 13 European countries. We adopt an ex-ante parametric approach and rely on the dissimilarity index as our reference inequality metric. In addition to a commonly used set of circumstances, we pay particular attention to the role of adverse early-life conditions, such as the experience of harm and the quality of the relationship with parents. In order to quantify the relative importance of each circumstance, we apply the Shapley inequality decomposition method. Our results suggest that inequality of opportunity in health is not stable over the life cycle - it is generally lower at younger ages and then monotonically increases. Moreover, it varies between different birth cohorts and is generally higher for younger individuals than for older age groups. Finally, the contribution of adverse early life conditions ranges between 25% and 45%, which is comparable to the share of socio-economic circumstances but significantly higher than the relative contribution of other demographic characteristics, especially at younger ages.
Speaker
Matija Kovacic is a researcher in the European Commission's Joint Research Centre (Ispra). He is also affiliated with the Department of Economics at Ca’ Foscari University of Venice as a subject expert in Empirical Economics and Microeconomics. Before that, he was a post-doc researcher at the Ca’ Foscari University of Venice and the "Marco Fanno" Department of Economics, University of Padua. His research interests include the analysis of individual attitudes and choices; inequality; and health economics.
JRC B2 Seminar: "Public support for tax policies in COVID-19 times: Evidence from Luxembourg" - Javier Oliveira
Abstract
We study attitudes towards the introduction of hypothetical new taxes to finance the cost of the COVID-19 pandemic. We rely on survey data collected in Luxembourg in 2020. The survey asks for the agreement of respondents over: a one-time net wealth tax, an inheritance tax, a temporary solidarity income tax, and a temporary increase in VAT. All questions include different and randomly assigned tax attributes (tax rates and exemption amounts). We find a clear divide with relatively high support for new wealth and inheritance taxes on the one hand and a low support for increases in VAT and income taxes on the other hand. While 58% of respondents agree or strongly agree with a one-time tax levied on net worth, only 24% are in favor of a small increase in VAT. Support for any tax is however negatively associated with the size of the tax as measured by the predicted revenues. Our results indicate that a one-time wealth tax could raise substantial revenues and still garner public support.
Speaker
Javier Olivera is a researcher in the department of living conditions at the Luxembourg Institute of Socio-Economic Research (LISER) and full professor of economics at Pontificia Universidad Catolica del Peru (PUCP). He is also affiliated to the department of economics at KU Leuven. Before his academic career he worked in the public sector, advising policy in Peru. His research interests include public economics, socio-economic inequality, pensions, attitudes towards redistribution and taxation, intergenerational transfers, old age and economic demography.
JRC B2 Seminar: 'Social and distributional impact of the revision of the Energy Tax Directive in the EU' - Eva Alonso Epelde & Xaquin Garcia
Abstract: “The proposed Energy Taxation Directive (ETD) reform is one of the most politically sensitive elements of the Fit for 55 package. it is expected that the new ETD will have a direct impact on the energy products that are consumed by the European households and many stakeholders are concerned that the proposal risk entrenching inequality. We provide new evidence from a microsimulation model developed by the Basque Centre for Climate Change (BC3) with IEEP and five other partners in the Think Sustainable Europe (TSE) network to assess the direct, overnight distributional impacts of the New Energy Tax Directive. We show that if carefully designed – including well-directed revenue-recycling, and alongside complementary policy measures – the proposals can achieve progressive impacts. In short, it could serve as a tool to fight both inequality and the climate crisis.”
JRC B2 Seminar: “Did the policy responses to COVID-19 protect Italian households’ incomes? Evidence from survey and administrative data” - Chiara Subrizi & Dalila de Rosa
Abstract:
This paper addresses the economic impact of the COVID-19 pandemic by providing timely and accurate information on Italian households’ income distribution, inequality and poverty risk, assessing the effects of policy responses during 2020. By building a unique and wide database with the latest survey, tax and administrative data at individual and firm level, and by using the micro-simulation model TAXBEN-DF from the Italian Department of Finance, the analysis nowcasts the income loss due to the economic shutdown since March 2020 and simulates most of the interventions adopted by the Government from March to December 2020. Results suggest that policy measures in response to the pandemic have been effective to limit the overall increase in income inequality and relative poverty, not being able yet to avoid a concerning polarization of incomes and large heterogeneous effects in terms of both income losses and measures’ compensation.
Scientific Conference Series Aida Fernández Ríos - María Loureiro: “Citizenship in light of climate change: socioeconomic aspects”
María Loureiro García, professor of Fundamentals of Economic Analysis, School of Economic and Business Science of the University of Santiago de Compostela (USC), and elected member of the RAGC. Scientific Director of ECOBAS.
“Citizenship in light of climate change: socioeconomic aspects”
Climate change is one of the most global and worrying phenomena faced by citizens in the 21st century. This presentation analyzes how sentiments towards climate change are expressed and transmitted globally and generate possibilities for the implementation of mitigation and adaptation policies in different continents. In the news, there is increasing global awareness of the occurrence of climate change and its economic and social consequences; this is especially true in countries that have recently experienced extreme events. To conduct this analysis, we employ a database containing over 100 million records of Twitter conversations globally from 2019 to the present.
By proximity, we will focus on the European case and analyze it causally, with microeconomic empirical applications, like how the energy transition and its consequences on energy prices affect the perception on the need for climate policy.
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