Announcement: Economic Record Best Paper Prize

The paper was officially announced as the winner at the 2016 Australian Conference of Economists dinner in Adelaide earlier this month. We caught up with the Authors to ask them about their winning paper:

What was the primary motivation for this research?

We wanted to know to what extent tax-benefit policy reforms were responsible for the decline in the redistributive effect of the tax-benefit system and the rise in income inequality in Australia.

What is the key message from your research project?

We find that after reaching a peak value in the late 1990s, the redistributive effect of taxes and benefits declined sharply. The tax-benefit reforms contributed to the decline in the redistributive effect of the system and to the increase in net income inequality.

What implications do your findings have for society?

Tax-transfer policies are key determinants of income inequality. Policy reforms in this area can have profound effects on income redistribution and the level of income disparities in society and they have the potential to offset concomitant market forces.

Do you think policy makers will re-evaluate their decision making as a result of this paper?

We think this is rather unlikely but we are hoping it’ll inform future fiscal reforms and encourage policy makers to consider the broader implications of tax-transfer reforms in terms of income inequality.

What are you working on next?

Two of our ongoing projects are considering:

  1. the extent of income mobility among the most disadvantaged Australians and whether the available evidence provides an overly embellished picture due to measurement issues; and
  2. a method to identify the relativities embedded in any tax-transfer system in terms of the differential treatment of households depending on the number of adults and children.

About the Authors:

Nicolas Herault is Senior Research Fellow (Labour Economics) at Melbourne Institute of Applied Economic and Social Research. He specialises in labour supply, micro-modelling and trade liberalisation policies.

Francisco Azpitarte is Ronald Henderson Research Fellow Melbourne Institute of Applied Economic and Social Research. He joined the Melbourne Institute after finishing his Post-doctoral studies at the London School of Economics and Political Science.

Published on behalf of the Economic Society of Australia, the Economic Record is intended to act as a vehicle for the communication of advances in knowledge and understanding in economics. It publishes papers in the theoretical, applied and policy areas of economics and provides a forum for research on the Australian economy. It also publishes surveys in economics and book reviews to facilitate the dissemination of knowledge.

The Economic Society of Australia is pleased to provide free access to the winning articles of the Economic Record Best Paper Prize. Read the article HERE