Technical documentation sheet
en
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| Indicator name |
Income inequality reducing effect of transfers |
| Periodicity |
Annual |
| Detailed definition |
This measures the extent to which social transfers on their own contribute to reducing market income inequality in the distribution of income in the EU Member States.
It is calculated as the difference between the income inequality measured using the S80/S20 calculated on the basis of a market income distribution whereby income is understood to be gross of any tax, and the distribution of income including income received from social transfers but still without deducting any tax, calculated for the same population. |
| Breakdowns |
none |
| Comments/ Policy relevance |
Relevant to combatting poverty and social exclusion.
Some weaknesses have been identified in the left- and right-tails of the distribution due to underreporting and sampling error. Sample size is robust for all EU Member States.
The extent to which social transfers are considered part of an individual’s taxable liability differs across EU Member States. For countries which include social transfers in the taxable liability of the benefit recipient, this may skew the reading of this indicator. |
| Source |
EU-SILC |
| SPC portfolio section |
Social inclusion – context |
| Key dimension |
Inequality |
| Context of use |
Relevant to assessing inequality, and combatting poverty and social exclusion.
This measures the extent to which social transfers on their own contribute to reducing market income inequality in the distribution of income in the EU Member States.
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| Further details and related documents |
This indicator is calculated on the basis of the microdata collected in the EU-SILC survey. Household income is summed from all sources (employment, social transfers), the OECD equivalisation scale is applied and income is attributed to each household member to create a distribution. Shares are calculated on the basis of this distribution.
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