Insurance, redistribution, and the inequality of lifetime income

• 成果类型: Article
• 署名作者: Haan, Peter; Kemptner, Daniel; Prowse, Victoria; Schaller, Maximilian
• 署名单位: Leibniz Association; DIW Berlin - Deutsches Institut fur Wirtschaftsforschung; Purdue University System; Purdue University
• 刊物名称: QUANTITATIVE ECONOMICS
• ISSN/ISSBN: 1759-7323
• DOI: 10.3982/QE1637
• 发表日期: 2025
• 页码: 565-613
• 关键词: Lifetime earnings; lifetime income; tax-and-transfer system; taxation; disability benefits; social assistance; INEQUALITY; redistribution; insurance; education; productive ability; RISK; dynamic life-cycle model; welfare; D63; H23; I24; I38; J22; J31

摘要

Individuals vary considerably in how much they earn during their lifetimes. This study examines the role of the tax-and-transfer system in mitigating such inequalities, which could otherwise lead to disparities in living standards. Utilizing a life-cycle model, we determine that the tax-and-transfer system offsets 45% of lifetime earnings inequality attributed to differences in productive abilities and education. Additionally, the system insures against 47% of lifetime earnings risk. Implementing a lifetime tax reform that links annual taxes to prior employment could enhance the system's insurance function, though it may involve tradeoffs in terms of employment and overall welfare.