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Inequalities, Insurance, Incentives and Immigration: Challenges and Solutions for the Welfare State

Project description

This research project examines how recent challenges, such as increased economic uncertainty and ethnic diversity, have affected inequality and support for the welfare state in European countries. It also investigates the work incentives embedded in the existing tax- and benefit systems and how these affect individuals’ behaviour, both in the short and in the long run. This information is a crucial input to governments’ decisions on how to finance the welfare system and redistribute income while maintaining incentives to work and avoiding poverty traps.

The project is divided into three strands. We first measure inequality developments using multidimensional and lifetime perspectives, and assess how different EU tax and benefit systems reduce economic vulnerability. Second, we investigate support for redistribution, asking how ethnic diversity affects people’s support for the welfare state and, using methods from experimental psychology, examining the determinants of redistributive attitudes for different groups. Third, we investigate the work incentives embedded in the existing tax and benefit systems and how these affect individuals’ behaviour, both in the short and in the long run, taking into account issues like the complexity of the tax design.

Click here for a detailed overview of the strands.

The research will use comparative micro data across European countries and detailed register data from individual countries. The project unites economists, political scientists, sociologists and psychologists with extensive experience advising governments and the EC on policy design.

The project is based at the Uppsala Centre for Fiscal Studies (UCFS) at the Department of Economics, University of Uppsala. UCFS conducts research in public economics and provides a forum for Swedish and international scholars, as well as Swedish policy makers, to interact. The team is led by the Main Applicant Eva Mörk, Professor of Economics, especially Public Economics. Mörk has considerable experience in co-ordinating research projects and has been in charge of several successful research proposals. The team at the University of Tampere is led by Jukka Pirttilä, a professor of economics, who studies taxation both theoretically and empirically and who has thorough expertise in managing large-scale research projects. The team in the University of Turku is led by Professor Kaisa Kotakorpi, a specialist in behavioural public economics. The UK team is led by Mike Brewer, a professor of economics at the University of Essex and Research Fellow at the Institute for Fiscal Studies. He has a very long and comprehensive record of interacting with policy-makers on trends in inequality and poverty, and tax and benefit design. All three country teams have excellent research records, and extensive experience of knowledge exchange, dialogue and policy advice with their national governments, the European Commission and social partners.

The comparative perspective of this project is hugely strengthened with the involvement of researchers from the EUROMOD project, including its Director, Professor Holly Sutherland. EUROMOD, a tax and benefit microsimulation model that covers all 27 countries of the EU, is designed to enable comparative policy analysis.

Team institutions

Researchers

Strand coordinators

Click here for a full list of our researchers

Workshops

Annual 4Is workshops are held for the entire project team to share work in progress and check progress against milestones.

Click here for 2015, 2016 and 2017 programmes (pdf).

UCFS also has a well-established guest programme and seminar series to which the team members are invited in order to exchange ideas across the three member countries.