In this paper, we analyze fiscal redistribution after the Great Recession. Are welfare states still effective in reducing income inequality? We use recent microdata from the Luxembourg Income Study... Show moreIn this paper, we analyze fiscal redistribution after the Great Recession. Are welfare states still effective in reducing income inequality? We use recent microdata from the Luxembourg Income Study to examine redistribution from transfers and income taxes, and the several underlying social programs that drive the changes in 31 countries. On average, we find that social transfers and income taxes reduce the Gini by 31%. In most countries, pensions are a dominant factor. After performing a number of sensitivity analyses, we conclude that the redistributive impact of the welfare state is still substantial. Show less
