abstract: 'Concern about rising inequality in advanced economies increased with the

  advent of the Great Recession in 2007. Rising unemployment and fiscal

  consolidation were expected to lead to greater inequality. We examine

  how the distribution of income in the EU countries that were hardest hit

  during the recession evolved over this time. We decompose the overall

  change in income inequality in Portugal, Ireland, Italy, Greece and

  Spain into parts attributable to changes in employment and wages,

  demographic changes, discretionary tax-benefit policy and automatic

  stabilisation effects. We implement this approach using the

  microsimulation model, EUROMOD, linked to EU-SILC survey data.

  Employment and wages were the main drivers of market income inequality

  increases. Automatic stabilisation effects, particularly through

  benefits, are found to play an important role in reducing inequality in

  all of the crisis countries. Their role is less important if we focus on

  the working-age population only, due to the limited nature of

  working-age benefits in southern European welfare systems. Discretionary

  policy changes also contributed to reductions in inequality, but to a

  much lesser extent.'
affiliation: 'Doorley, K (Corresponding Author), Econ \& Social Res Inst, Dublin,
  Ireland.

  Doorley, Karina; Callan, Tim, Econ \& Social Res Inst, Dublin, Ireland.

  Doorley, Karina; Callan, Tim, Inst Labor Econ IZA, Dublin, Ireland.

  Savage, Michael, Bank Ireland, Dublin, Ireland.'
author: Doorley, Karina and Callan, Tim and Savage, Michael
author-email: 'karina.doorley@esri.ie

  tcallaneconomics@gmail.com

  michael.savage@boi.com'
author_list:
- family: Doorley
  given: Karina
- family: Callan
  given: Tim
- family: Savage
  given: Michael
da: '2023-09-28'
doi: 10.1111/1475-5890.12250
earlyaccessdate: JAN 2021
eissn: 1475-5890
files: []
issn: 0143-5671
journal: FISCAL STUDIES
keywords: 'inequality; decomposition; Great Recession; discretionary policy;

  automatic stabilisation'
language: English
month: JUN
number: '2'
number-of-cited-references: '30'
pages: 319-343
papis_id: aa0ff0cb6e4667704d1c8cf51b24122b
ref: Doorley2021whatdrove
times-cited: '7'
title: What Drove Income Inequality in EU Crisis Countries during the Great Recession?*
type: Article
unique-id: WOS:000612179500001
usage-count-last-180-days: '2'
usage-count-since-2013: '9'
volume: '42'
web-of-science-categories: Business, Finance; Economics
year: '2021'