Analysis of the Relationship between Taxes and Social Benefits and Transfers in the EU
Analysis of the Relationship between Taxes and Social Benefits and Transfers in the EU

Author(s): Nadiya Dubrovina, Jana Péliová, Erika Neubauerová
Subject(s): Supranational / Global Economy, Welfare systems, Public Finances, Fiscal Politics / Budgeting, Socio-Economic Research
Published by: Masarykova univerzita nakladatelství
Keywords: taxes; social contribution; social benefits; social transfers; econometric modeling;
Summary/Abstract: Taxes have main contribution to the government revenue, tax revenue made up about 90% of total government revenue in the European Union. Government revenue, expenditure and deficit/surplus are main objectives of fiscal policy and the analysis of their dynamics plays very important role in the formation and coordination of the strategic and tactic tasks for socio-economic development in the countries. For the more detail analysis of dependence between taxes and social benefits and transfers we used time series of these indicators for EU countries. For the modeling the initial data as absolute values of the different taxes, social contributions and social benefit and transfers per inhabitant were used for 2002-2012. It should be noted that most of time series included linear trends that is why for the panel data analysis we used the first differences of these indicators. These models explain the complicated relationship between changes of taxes, social contributions and social benefits and transfers with individual countries effects (fixed effects) for each EU countries and can be used for prediction of features of social benefits and transfers as results of changes in fiscal policy in different EU countries.

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