Reducing poverty and inequality through tax-benefit reform and the minimum wage: the UK as a case-study

Atkinson’s book Inequality: What Can Be Done? (Harvard University Press, 2015) sets out a range of concrete proposals aimed at reducing income inequality, which cover a very broad span but include major changes to the income tax and social transfers system and the minimum wage. These are framed with specific reference to the UK but have much broader relevance in demonstrating how substantial the impact on inequality of such measures could be. This paper assesses the first-round effects of these tax, transfer and minimum wage reforms on income inequality and poverty based on a microsimulation approach using EUROMOD. The reforms involve a significantly more progressive income tax structure, a major increase in the minimum wage to the level which is estimated to represent the ‘Living Wage’, and alternative routes to reforming social transfers – either to strengthen the social insurance element or to restructure the entire system as a Participation Income (a variant of Basic/Citizen’s Income). The results show how the first-round effects of either set of tax and transfer proposals would be to substantially reduce the extent of income inequality and relative income poverty and the paper draws out how the two approaches differ in their effects. The additional impact of raising the minimum wage to the Living Wage is modest, reflecting in particular the position of beneficiaries in the household income distribution and the offsetting effects on household income of the withdrawal of means-tested cash transfers.     

Hope and Adaptation to Old Age: Their Relationship with Individual-Demographic Factors

This study examined the relationship between hope as disposition, adaptation to old age, and individual-demographic factors. One hundred and fifty older adults, aged 60–93 years old, completed the Adult Dispositional Hope Scale developed by Snyder et al. [1991, Journal of Personality and Social Psychology, 60, pp. 570–585], and the Adaptation to Old Age Questionnaire developed by Efklides et al. [2003, European Psychologist, 8, pp. 178–191]. Factor analyses revealed 2 factors for hope, “Pathways Thought” and “Agency Thinking”, and 4 factors for adaptation to old age, “Health Comparison”, “General Adaptation/Self-Efficacy”, “Self-Control”, and “Generativity”. Regression analyses showed that hope as pathways thought predicted all factors of adaptation, whereas hope as agency thinking predicted only “General Adaptation/Self-Efficacy” and “Self-Control”. There were also some effects of gender, education, marital status, place of residence, and health status on specific aspects of adaptation to old age.