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Swapping Policies: Alternative Tax-Benefit Strategies to Support Children in Austria, Spain and the UK

Published online by Cambridge University Press:  08 August 2007

HORACIO LEVY ,
CHRISTINE LIETZ  and
HOLLY SUTHERLAND
HORACIO LEVY
Affiliation:
Institute for Social and Economic Research, University of Essex email: [email protected]
CHRISTINE LIETZ
Affiliation:
Institute for Advanced Studies, Vienna email: [email protected]
HOLLY SUTHERLAND
Affiliation:
(Contact author) Institute for Social and Economic Research, University of Essex, Colchester, Essex CO4 3SQ email: [email protected]
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Abstract

Three European countries with very different tax-benefit systems have recently substantially increased the level of support for children: Austria, Spain and the UK. Austria mainly makes use of universal benefits; Spain, tax concessions; and the UK means-tested benefits and tax credits. This article addresses the question of whether the chosen strategies are in fact the most effective for each country. It considers what would have happened if these countries had transformed the architecture of their systems in either of the other two directions. It makes use of EUROMOD, the European tax-benefit microsimulation model that is designed for making cross-country comparisons, to explore the distributional and, in particular, child poverty effects of budget-neutral alternatives. The results show that three factors – the level of spending, its structure, and the way it impacts in a particular national context – affect the outcomes to varying degrees.

Type
Article
Information
Journal of Social Policy , Volume 36 , Issue 4 , October 2007 , pp. 625 - 647
Copyright
Copyright © Cambridge University Press 2007

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