Redistribution by the State in Austria 2015

The current WIFO redistribution study on the year 2015 builds on the latest available data. Based on the distribution of market and primary incomes (market incomes, old-age pensions and net imputed rents), on the revenue side the impact of social contributions and direct and indirect taxes on their distributional effects are analysed. On the expenditure side, the focus is on public social and welfare benefits in cash and in kind in the areas of health, education, family, housing, unemployment and needs-based minimum income. Before redistribution the average income of the top 10 percent households in Austria was 30 times that of the bottom 10 percent households. After redistribution the relation fell to 5.5. Redistribution resulted in a reallocation of income from the households in the upper third to those in the lower third of the distribution of primary income. In-kind public benefits contributed most to this income equalising effect, followed by income-related taxes and contributions and public cash transfers (excluding pensions). The regressive structure of indirect taxes lowered the degree of redistribution somewhat. Between 2000 and 2010 the distribution of primary and secondary incomes (primary incomes plus monetary and in-kind public transfers, net of all direct and indirect taxes) became more unequal. This development reversed between 2010 and 2015: the inequality of primary income decreased slightly. During this time, the extent of income redistribution also increased leading to an even larger decline in the dispersion of secondary incomes. This was the result of opposing developments in households with different socio-demographic characteristics. – This research uses data from European Union Statistics on Income and Living Conditions (EU-SILC), Consumer Survey (Konsumerhebung) and Household Finance and Consumption Survey (HFCS).