A Common Base Answer to the Question "Which Country is Most Redistributive?"
Thor Olav Thoresen, Runa Nesbakken, and Peter J. Lambert
The Scandinavian Journal of Economics
We believe that what most authors have in mind when referring to the “most redistributive country” is a tax and transfer schedule that is most redistributive across all pre‐tax and transfer income distributions. In order to measure each country's tax and transfer redistribution according to the same baseline, we suggest using the transplant‐and‐compare method of Dardanoni and Lambert (2002, Journal of Public Economics 86, 99–122) to establish a common base. The redistributive effects of countries’ tax and transfer schedules are illustrated by employing microdata on eight countries from the Luxembourg Income Study (LIS). Of these eight countries, Finland is found to be the most redistributive country, according to the common base method.