04/2023 – Inequality and Public Policy

The debate about growing inequality has gained momentum in recent years, not least due to the economist Thomas Piketty. Disparities in income and wealth are usually viewed critically, but they certainly serve important functions in a market economy. Problems arise when opportunities are unequally distributed. This is not only unjust, but also leads to potentials in society not being fully tapped. Therefore, the state intervenes in various ways to reduce inequality.

However, the exact extent of inequality and redistribution is not easy to measure. Sometimes money simply moves from one pocket to another, and most distribution analyses only consider some of the state’s interventions. It is equally difficult to clearly determine the side effects of taxes and transfers. Our team in ZEW’s Research Group “Inequality and Public Policy” tackles these questions. Their studies provide a solid basis for policy decisions. This new ZEW Monthly issue focusing on “Inequality and Public Policy” provides current insights into the group’s work.