Redistribution by the State in Austria 2019 and Developments from 2005 to 2019

The study analyses the effects of the welfare state on income inequality and relative poverty in Austria. Based on market incomes, the distributional effects of state cash and in-kind benefits in the areas of health, education, family, housing, unemployment and social exclusion as well as social contributions and (in)direct taxes are examined. The most recent linkable data for such an analysis refer to the year 2019. As a result of redistribution, the Gini coefficient falls from 0.466 (market income) to 0.213 (secondary income) in 2019, and the at-risk-of-poverty rate falls by a factor of 2.5 between market income and disposable income. A similar effect is seen for the years 2005, 2010 and 2015. The largest redistributive contribution is made by gross public pensions, followed by public health benefits. Over time, the relative redistribution contribution of direct taxes has increased significantly. The stable distribution measures in the cross-section of the population in private households conceal diverging income developments between households by age group. The risk of poverty is above average in households with children and main earners under the age of 46 and has increased between 2005 and 2019.