Inequality, poverty and material deprivation in the European Union: An analysis with macro data of the role of fiscal policies

Abstract

Within the institutional architecture of the European Union, one of the fundamental objectives at the social and economic level is the reduction of poverty, inequality and the identification of vulnerable households with severe material deprivation. In this sense, it is worth asking whether fiscal policy can be relevant given that, unlike monetary policy, it is managed by the member countries. In line with recent proposals that analyse the distributional impact of fiscal policies (Bazoli et al., 2022), in this paper we analyse for the period 2008-2019 the relationships between the main distributional dimensions (inequality, poverty and severe material deprivation) and the main fiscal indicators. Our results suggest that fiscal indicators have a significant impact on inequality and relative poverty, both through expenditure (public consumption) and revenue (direct and indirect taxes).

Keywords:

inequality, poverty, severe material deprivation, fiscal policies

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