Mobility and the lifetime distributional impact of tax and transfer reforms

Document type
Working Paper
Levell, Peter; Roantree, Barra; Shaw, Jonathan
Institute for Fiscal Studies
Date of publication
9 September 2016
IFS Working Paper; W16/17
Social Policy, Employment, Poverty Alleviation Welfare Benefits and Financial Inclusion
Social welfare
Material type

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The distributional impact of proposed reforms plays a central role in public debates around tax and transfer policy. Accounting for realistic patterns of mobility in employment, earnings and household circumstances over the life-cycle greatly affects this assessment of the distributional effects of tax and transfer reforms.

This paper focuses on three reforms modelled in the UK context: (i) changes to out-of-work versus in-work benefits, (ii) adjustments to income tax rates, and (iii) reforms to indirect taxation. In all three cases, the long-run distributional impact differs to that implied by a standard cross section analysis in important ways.

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