doiSerbia

Robin Hood versus Piggy Bank: Income redistribution in Portugal 2006-2010

Rodrigues Carlos Farinha (University of Lisbon, School of Economics and Management, Centre for Applied Mathematics and Economics, Lisbon, Portugal)
Andrade Isabel (Centre for Applied Mathematics and Economics, Lisbon, Portugal)

The redistributive effect of the Portuguese welfare state through pensions, benefits and income taxes is investigated in detail over the 2006- 2010 period using disposable income as benchmark. All social and fiscal policy instruments analysed contribute significantly to the reduction in inequality and poverty, with benefits other than pensions being the most cost-efficient. However, the impact of the economic crisis and austerity policies implemented from 2010 has reversed the previous trends and affected negatively the efficacy and efficiency of all instruments.

Keywords: Income inequality, Redistribution, Tax and expenditure policy, Portugal