Abstract
The gender wage gap and the gender work gap are sizable, persistent and well documented for many countries. The result of the gender wage and gender work gap combined is an income gap between men and women. A small literature has begun to examine how the tax-benefit system contributes to closing gender income gaps by redistributing between men and women. In this paper, we study the effect of tax-benefit policy on gender differences in income in the EU27 countries and the UK. We use microsimulation models linked to survey data to estimate gender gaps in market income (before taxes and transfers) and disposable income (after taxes and transfers) for each country. We then decompose the difference between the gender gap in market income and the gender gap in disposable income into the relative contribution of taxes and benefits in each country. We also isolate the relative contributions of the gender wage gap and the gender work gap to the overall gap in income between men and women in two of these countries.
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Data availability
The data used in this work is EU-SILC (for the European countries other than Ireland), FRS (for the UK) and SILC for Ireland. The EU-SILC datasets are adapted by the Joint Research Centre and Eurostat for use with EUROMOD. The FRS data is adapted by the Centre for Microsimulation and Policy Analysis for use with UKMOD. The SILC data is adapted by the Economic and Social Research Institute for use with SWITCH. The EU-SILC and FRS data can be accessed by researchers who apply through the EUROMOD website:
Access EUROMOD | EUROMOD—Tax-benefit microsimulation model for the European Union (europa.eu)
The Irish SILC data can be accessed by researchers based in Ireland who are appointed Officer of Statistics by the Central Statistics Office:
RMF Application Procedure—CSO—Central Statistics Office
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Open Access funding provided by the IReL Consortium. Funding from the ESRI’s Tax, Welfare and Pensions Research Programme (supported by the Departments of Public Expenditure and Reform, Employment Affairs and Social Protection, Health, Children, Equality, Disability, Integration and Youth and Finance) is gratefully acknowledged.
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The results presented here are based on EUROMOD version I2.0 + , UKMOD version A1.5 + and SWITCH version 1.3. EUROMOD is maintained, developed and managed by the Institute for Social and Economic Research (ISER) at the University of Essex, in collaboration with national teams from the EU member states. We are indebted to the many people who have contributed to the development of EUROMOD. The process of extending and updating EUROMOD is financially supported by the European Union Programme for Employment and Social Innovation ‘Easi’ (2014-2020). UKMOD is maintained, developed and managed by the Institute for Social and Economic Research (ISER) at the University of Essex. The process of extending and updating UKMOD is financially supported by the Nuffield Foundation, based on the annual update of the UK component of EUROMOD funded by the European Union Programme for Employment and Social Innovation “EaSI” (2014-2020). SWITCH is maintained, developed and managed by the Economic and Social Research Institute. Funding from the ESRI’s Tax, Welfare and Pensions Research Programme (supported by the Departments of Public Expenditure and Reform, Employment Affairs and Social Protection, Health, Children and Youth Affairs and Finance) is gratefully acknowledged. We are grateful to the CSO for facilitating access to the Survey of Income and Living Conditions (SILC) Research Microdata File used to construct the database for the SWITCH tax-benefit model. The results and their interpretation are the authors’ responsibility. We are grateful to research assistance from Míde Griffin and Alyvia McTague.
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Doorley, K., Keane, C. Tax-benefit systems and the gender gap in income. J Econ Inequal 22, 285–309 (2024). https://doi.org/10.1007/s10888-023-09594-6
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DOI: https://doi.org/10.1007/s10888-023-09594-6