# **TABLE OF CONTENTS**

|TABLE OF CONTENTS.............................................................................................................................3|
|---|
|LIST OF TABLES AND CHARTS............................................................................................................3|
|1.<br>INTRODUCTION...........................................................................................................................4|
|2.<br>HASINCOMEINEQUALITYCONTINUED TORISE INEU8 COUNTRIES?.............................7|
|3.<br>THEEU8ANDEU15COUNTRIES HAVE SIMILAR LEVELS OF INCOME INEQUALITY.........8|
|4.<br>TAX ANDTRANSFERPOLICIESPLAYA VERYIMPORTANTREDISTRIBUTIVEROLE.......10|
|5.<br>WHATEXPLAINSDIFFERINGLEVELS OFPUBLICSUPPORT FORREDISTRIBUTION?......15|
|6.<br>THEROLE OFEDUCATION ANDLABORMARKETPARTICIPATIONRATES......................18|
|7.<br>CONCLUDINGOBSERVATIONS................................................................................................24|
|ANNEX1: DATASOURCES................................................................................................................26|
|ANNEX2: PUBLICSUPPORT FORREDISTRIBUTION.......................................................................28|

# **LIST OF TABLES AND CHARTS**

|Table 1: Long-term Trends in Income Inequality.......................................................................................................... 7|
|---|
|Table 2: Various Summary Measures of Income Inequality ......................................................................................... 8|
|Table 3: Average taxes and benefits as a share of disposable incomes...................................................................... 10|
|Table 4: Impact of tax and benefit systems on income inequality in EU countries ................................................ 13|
|Table 5: Perceptions regarding why people are in need............................................................................................... 16|
|Table 6: Simulated Probabilities Derived from Ordered Probit Model .................................................................... 17|
|Table 7: Distribution of equivalized disposable incomes in EU8 countries............................................................. 18|
|Table 8: Educational attainment of the population in EU8 countries....................................................................... 19|
|Table 9: Work status and level of intensity in EU8 countries..................................................................................... 20|
|Table 10: Regional variation in standard-of-living within selected EU member states........................................... 20<br>|
|Table 11: Regression Analysis: (log) Equivalized Disposable Income ...................................................................... 21|
|Table 12: Unadjusted vs. adjusted regional variation in standard-of-living .............................................................. 22|
|Chart 1. Strong Public Support for Reduced Income Inequality ................................................................................. 4|
|Chart 2. Most EU8 countries have average incomes much lower than in the EU15 countries............................... 9|
|Chart 3: Taxes as a share of disposable incomes.......................................................................................................... 11|
|Chart 4: Benefits as a share of disposable incomes...................................................................................................... 11|
|Chart 5: Tax incidence curves ......................................................................................................................................... 12|
|Chart 6: Benefit incidence curves ................................................................................................................................... 13|
|Chart 7. The role of public transfers in explaining differences in income inequality.............................................. 14|
|Chart 8: Strong public support for redistribution in EU8 countries.......................................................................... 15|
|Chart 9. Public support of redistribution is correlated with perceived level of economic injustice...................... 16<br>Chart 10. Contribution of tax and benefit systems in reducing income inequality.................................................. 24|