The redistributive effect of the Romanian tax-benefit system: a microsimulation approach

Publication type:

Journal Article


Eva Militaru

Publication date

15 Mar 2015


This paper attempts to investigate the income distribution of Romanian households, focusing on the role of the tax-benefit system in income redistribution. We evaluate the redistributive effect by estimating income inequality changes due to tax-benefit components. We use EU-SILC microdata and the EUROMOD microsimulation model to simulate income components. The results point out that income inequality is considerably reduced through the tax-benefit system, as a great deal of income is redistributed among households. The analysis of the income components that contribute to inequality reduction emphasizes that pensions, personal income taxes and social benefits are in favour of inequality reduction, while social contributions act the opposite way. Our results are sensitive to social and fiscal policy changes.

Published in

Journal of Applied Quantitative Methods





Welfare Benefits, Income Dynamics, Microsimulation and Taxation