Comparative Analysis Of Fiscal Equalisation And Transfers For Spatial Justice In Europe.pdf

Key Findings:

Poverty Reduction vs. Regional Inequality: Policies that best reduce poverty at the local level may not necessarily mitigate regional disparities effectively. Public pensions and means-tested benefits are highlighted as crucial for poverty alleviation in both poor and wealthy regions, with a stronger impact on poorer areas. Income taxes are shown to be powerful tools for reducing regional inequality, while property taxes and social insurance contributions can exacerbate it.
Regional Disparities: The analysis reveals significant variations in the distribution of income sources across regions within each country.
Country Specific Insights: The report provides specific findings for each country, highlighting unique trends and policy implications. For example, public pensions are particularly impactful in Czechia, Greece, and Italy, while means-tested benefits play a stronger role in Spain, the UK, and France.

Methodology:

The study utilizes EUROMOD, a tax-benefit microsimulation model for the EU and UK, to analyze microdata from EU Statistics on Income and Living Conditions (EU-SILC) and the Family Resources Survey (FRS). This allows for detailed calculations of:

Regional distribution of market incomes, public pensions, means-tested and non-means-tested benefits.
Regional collection of income taxes, property taxes, and social insurance contributions.

Policy Implications:

The findings underscore the importance of tailored policy approaches to address both poverty and regional disparities. The report recommends:

Targeted interventions: Focusing on strengthening public pension systems and expanding access to means-tested benefits in disadvantaged regions.
Progressive taxation: Implementing progressive income tax structures to reduce regional inequality.
Place-based policies: Designing specific measures to address unique challenges faced by different regions within a country.