Redistribution, work incentives and thirty years of UK tax and benefit reform

Document type
Working Paper
Adam, Stuart; Browne, James
Institute for Fiscal Studies
Date of publication
9 December 2010
IFS working paper; 10/24
Poverty Alleviation Welfare Benefits and Financial Inclusion, Employment
Social welfare
Material type

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Governments wishing to reduce inequality by redistributing money from the rich to the poor face the dilemma that in doing so, for example by increasing tax rates and means-tested benefits, they reduce the incentive for individuals to increase their incomes. Policy-makers have tried to balance these objectives in different ways and, partly as a result of this, the tax and benefit system today is very different from the one that existed thirty years ago. In this paper we look at how the tax and benefit system redistributed income and affected incentives to work in 2009-10, and at the effect of tax and benefit reforms between 1978-79 and 2009-10 on the level of inequality and work incentives.

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