We are doing science for policy
The Joint Research Centre (JRC) is the European Commission's science and knowledge service which employs scientists to carry out research in order to provide independent scientific advice and support to EU policy.
Alberto Tumino, from JRC fiscal policy analysis team, has presented at the Economic Department of the University of Valencia his joint work with Salvador Barrios on the stabilisation properties of the tax benefit system.
This work analyses income and demand stabilisation for the 28 EU countries, building simple indicators of automatic stabilisation through the tax-benefit systems. The simulations are based on EUROMOD, the EU tax-benefit microsimulation model. The results show that the income stabilisation properties of the tax-benefit systems varies substantially across countries. Taxes provide the highest stabilisation, while social benefits are more important for lower income households. The work also shows that the demand is less sensitive than income to shocks and that more stabilisation is correlated with more redistribution.