1 / 12

Economic well-being and distributional effects of housing-related policies in 3 EU countries

2 nd Microsimulation research workshop Bucharest, 11-12 October 2012 . Economic well-being and distributional effects of housing-related policies in 3 EU countries. Virginia Maestri AIAS – University of Amsterdam. Introduction and motivation.

rumor
Download Presentation

Economic well-being and distributional effects of housing-related policies in 3 EU countries

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 2ndMicrosimulation research workshop Bucharest, 11-12 October 2012 Economic well-being and distributional effects of housing-related policies in 3 EU countries Virginia Maestri AIAS – University of Amsterdam

  2. Introduction and motivation • Increasing importance of housing (wealth, spending) • Role of policy (favorable tax treatment of housing) • Cross-country differences in housing policies and tenure structure • The different aims of housing-related policies: re-pricing, tax revenues, redistribution V. Maestri, AIAS-UvA - Economic well-being and housing-related policies in 3 EU countries

  3. Aim of the paper • Extend the existing literature by considering a comprehensive set of housing policies together with imputed rent • Impact of each housing-related policies on inequality and poverty • Impact of housing-related policies on different tenure and age groups V. Maestri, AIAS-UvA - Economic well-being and housing-related policies in 3 EU countries

  4. Data and methodology • Input data Euromod 3+: 2006 EE-SILC & IT-SILC, 2003 UK FRS (IR and paid property taxes) • Benefit incidence approach • Distinction between market and social imputed rent • Quantile (extended) income share at each step, inequality and poverty, by age and tenure groups • Original market income (A1) • Original market income plus private imputed rent (A2) • Income net of taxes and benefits, excluding those housing-related (B1) • Income net of taxes and benefits, excluding those housing-related plus private imputed rent (B2) • B2 plus mortgage interests deductions (C) • C plus other housing-related deductions (D) • D minuspropertytax (E) • E plus deduction for property tax (F) • F plus housing benefits (G) • G plus social imputed rent (H) V. Maestri, AIAS-UvA - Economic well-being and housing-related policies in 3 EU countries

  5. Overview of housingpolicies & IR V. Maestri, AIAS-UvA - Economic well-being and housing-related policies in 3 EU countries

  6. Results - Estonia • IR reduces inequality by 15-10% and poverty by 17-22% and the redistributive power of taxes • Limited effect of mortgage relief, Land tax and social IR • Small redistributive effect of housing benefits and on poverty and inequality V. Maestri, AIAS-UvA - Economic well-being and housing-related policies in 3 EU countries

  7. Results - IT • IR reduces inequality by 8-2%, slightly poverty and the redistributive power of taxes • No effect of mortgage and other reliefs, property tax and housing benefits (small) • Property tax slightly increases the poverty rate V. Maestri, AIAS-UvA - Economic well-being and housing-related policies in 3 EU countries

  8. Results – UK • IR reduces inequality by 5-4%, poverty by <1% but not the poverty reduction power of taxes • The Council tax is regressive, even after the deduction but this reduces poverty • Housing benefits and social IR reduce inequality and considerably poverty (-40%), but reranking V. Maestri, AIAS-UvA - Economic well-being and housing-related policies in 3 EU countries

  9. Results by tenure group • Within > between inequality • Winners: outright owners in IT, &free tenants in EE, & social tenants in UK • Losers: owners with mortgage in UK and EE, private tenants in IT and EE V. Maestri, AIAS-UvA - Economic well-being and housing-related policies in 3 EU countries

  10. Results by age group • Within > between inequality • Winners: over 60 year-old • Losers: under 40 in EE, 40-60 in UK, both age groups in IT V. Maestri, AIAS-UvA - Economic well-being and housing-related policies in 3 EU countries

  11. Comparative assessment of HP • Housing-related policies are the most effective in reducing inequality in EE (-11%) and poverty in UK (-56%), small effect in IT • Housing policies are a more important tool for reducing inequality (-7%) and poverty (-46%) than imputed rent only in the UK (fig) V. Maestri, AIAS-UvA - Economic well-being and housing-related policies in 3 EU countries

  12. Conclusions • Housing polices are relevant for reducing inequality and poverty in UK, poverty in EE, not relevant in IT • Common features: the design of property taxes is not progressive, inequality is higher within than between tenure categories, housing-related policies follow a life-cycle redistributive pattern • The redistributive effect of housing policies mirrors the the size of public expenditure on housing • The importance of the non-progressive effect of property taxes reflects the relative importance of property taxes in total tax revenues • Limitation of analysis: static, no capital gains & transaction taxes • Policy debate on housing taxation V. Maestri, AIAS-UvA - Economic well-being and housing-related policies in 3 EU countries

More Related