Alari Paulus

Alari Paulus
Eesti Pank · Research Division

PhD

About

48
Publications
6,913
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818
Citations
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July 2006 - present
University of Essex
Position
  • Research Associate

Publications

Publications (48)
Article
Full-text available
Abstract The last review of the ECB’s monetary policy strategy in 2003 followed a period of predominantly upside risks to price stability. Experience following the 2008 financial crisis has focused renewed attention on the question of how monetary and fiscal policy should best interact, in particular in an environment of structurally low interest r...
Article
Full-text available
Various national studies have used the expenditure method (Pissarides and Weber in J Public Econ 39(1):17–32, 1989) to estimate income underreporting by the self-employed relative to the wage earners. Within Europe, the studies mostly consider the UK or individual Nordic countries, while no data are available for most Southern European and Eastern...
Article
Full-text available
Changing complex behaviors such as tax evasion may require several behavioral interventions, or nudges. We developed a tailored compound intervention approach to increase employers’ payroll tax compli-ance in Estonia’s construction industry. First, we used anthropological methods to gain insights into the deci-sion processes of employers and employ...
Article
Full-text available
Tax‐benefit policies affect changes in household incomes through two main channels: discretionary policy changes and automatic stabilizers. We study their role in the EU countries in 2007–14 using an extended decomposition approach. Our results show that the two policy actions often reduced rather than increased inequality of net incomes, and so he...
Article
Full-text available
This paper assesses the effect of key demographic changes (population ageing and increasing educational attainment) that are expected by 2030 on the income distribution in the EU-27 and examines the potential of tax-benefit systems to counterbalance negative developments. Theory predicts that population ageing should increase income inequality, whi...
Preprint
Full-text available
Changing complex behaviours such as tax evasion often requires combining several behavioural insights. We developed a tailored compound intervention approach to increase employers’ payroll tax compliance in Estonia’s construction industry. First, we used anthropological methods to gain insights into the decision processes of employers and employees...
Article
Full-text available
We assess how tax‐benefit policy developments in 2001–11 affected the household income distribution in seven EU countries. We use the standard microsimulation‐based decomposition method, separating further the effect of structural policy changes and the uprating of monetary parameters, which allows us to measure the extent of fiscal drag and benefi...
Chapter
This chapter examines the extent to which tax and benefit policy changes introduced in the period 2001−2011 had poverty- or inequality-reducing effects. The analysis uses the tax−benefit model EUROMOD and covers seven diverse EU countries: Belgium, Bulgaria, Estonia, Greece, Hungary, Italy, and the United Kingdom. It separates effects of structural...
Article
Full-text available
The effect of demographic change on the labor force and on fiscal revenues is topical in light of potential pension shortfalls. This paper evaluates the effect of demographic changes between 2010 and 2030 on labor force participation and government budgets in the EU-27. Our analysis involves the incorporation of population projections, and an expli...
Article
Full-text available
The paper considers the austerity measures introduced in the wake of the financial and economic crisis in the late 2000s in relation to their distributional impact across households and potential effects on aggregate demand. We determine the size, composition and effects of fiscal consolidation using a ‘bottom-up’ measurement strategy and find nota...
Technical Report
Full-text available
Analysis of distributional effects of Estonian tax policy on households’ tax burden
Article
We provide an overview of microsimulation approaches for assessing the effects of policy on income distribution. We focus on the role of tax-benefit policies and review the concept of microsimulation and how it contributes to the analysis of income distribution in general and policy evaluation in particular. We consider the main challenges and limi...
Article
Full-text available
We compare the distributional effects of policy changes introduced in the period 2008-2013 in twelve EU countries using the EU microsimulation model EUROMOD. The countries, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Latvia, Lithuania, Portugal, Romania and the UK, chose different policy mixes to achieve varying degrees of fiscal conso...
Article
Full-text available
This paper examines the extent to which tax and benefit policy changes introduced in the period 2001-11 had a poverty- or inequality-reducing effect. We assess whether the period was indeed a “missed opportunity” for policy changes to make a difference to poverty reduction since the Lisbon Treaty, given the general lack of improvement shown by pove...
Article
Full-text available
We compare the distributional effects of policy changes presented as fiscal consolidation measures in nine EU countries that experienced large budget deficits following the financial crisis of the late 2000s and subsequent economic downturn, using the EU microsimulation model EUROMOD. The nine countries, Estonia, Greece, Spain, Italy, Latvia, Lithu...
Article
Full-text available
This article investigates how the distribution of income changes when the standard disposable income (DI) is replaced by an extended income (EI) concept that includes the three “I”s: indirect taxes, imputed rent, and in-kind benefits. Second, it assesses the distributional effects of the main types of tax-benefit instruments under different income...
Article
Full-text available
Imputed rental income of homeowners is tax exempt in most countries, despite the long-standing arguments recommending its inclusion in the tax base, on both equity and efficiency grounds. The current fiscal crisis revived interest towards this form of taxation. The paper investigates the fiscal and distributional consequences of including homeowner...
Article
Full-text available
We compare the distributional effects of austerity measures that have been introduced in 6 EU countries in the period of large government budget deficits following the 2007-8 financial crisis and subsequent economic downturn. We explore the effects of policy changes presented as austerity measures in Estonia, Ireland, Greece, Spain, Portugal and th...
Article
International comparisons of inequality based on measures of disposable income may not be valid if the size and incidence of publicly provided in-kind benefits differ across the countries considered. The benefits that are financed by taxation in one country may need to be purchased out of disposable income in another. We estimate the size and incid...
Article
Recent success of the flat income tax in Eastern Europe raises questions about whether there is scope for such a policy reform in Western Europe as well. We address this by estimating the potential distributional impact of various flat taxes for selected Western European countries. Our simulations show that in specific circumstances a revenue neutr...
Article
Full-text available
We suggest a new comprehensive measure of support given through tax-benefit systems to families with children. Using microsimulation techniques, this accounts for all provisions contingent on the presence of children, while usually only gross child/family benefits are considered. We use EUROMOD, the European Union tax-benefit microsimulation model,...
Article
Full-text available
Tax and benefit systems in the enlarged EU vary significantly in size and structure. We examine how taxes and benefits shape income distributions in 19 EU countries, focusing on the differences between Western European countries (EU15) and Eastern European countries (Estonia, Hungary, Poland, Slovenia). We use EUROMOD, the European tax-benefit micr...
Article
Full-text available
This paper takes a close look at the advantages and disadvantages of the flat tax and looks at its proven benefits and failings in some European countries which adopted it and its theoretical or possible effects on the economies of other European countrie
Article
Full-text available
Any opinions expressed here are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but the institute itself takes no institutional policy positions. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between sci...
Article
This paper takes a close look at the advantages and disadvantages of the flat tax and looks at its proven benefits and failings in some European countries which adopted it and its theoretical or possible effects on the economies of other European countrie
Article
Full-text available
Families with children receive significant support from government. This is mainly to reduce the risk of child poverty and assist parents with childcare responsibilities to balance jobs and family life. There is a great variety of measures to support families and these have been used to differing extents across the EU. This policy brief focuses on...
Article
Unlike Western countries, there are no studies focusing on the fulltime/part-time wage gap in Central and Eastern Europe despite high wage inequalities observable in many of these countries. The focus of this paper is the incidence and reasons for the part-time wage gap in Estonia, a small Eastern European catch up economy. We use Estonian Labour F...
Technical Report
The future of the company is determined by finding people with the necessary skills or at least the will to learn. Enterprises in Tartu and Southern Estonia are in need of middle level specialists, most of all, workers in the fields of mechanics and metalworking, electronics and control engineering, electrical engineering and energetics, materials...
Article
Full-text available
This paper analyses the impact of several tax-benefit reforms on the employment of different skill groups under various wage formation systems. We adapt a general equilibrium model initially developed for the Finnish economy by Alho (2006), combining it with elements from Bovenberg et al. (2000) and Hinnosaar (2004a, b). Policy simulations demonstr...
Article
Full-text available
In this paper we analyse whether differences in labour force participation and employment rates in eight Central and East European new member states can be explained by incentives that tax and benefit systems generate. We use macro-level cross-country data on labour market outcomes, tax wedge and marginal effective tax indicators in 1996-2004. We u...
Article
Full-text available
This paper considers the welfare effects of tax evasion in a model with a formal sec- tor and an informal sector. Individuals have different skills or abilities, but also different atti- tudes toward tax evasion. The government seeks to maximize social welfare when setting the income tax rate, the auditing probability, and the fine imposed on indiv...
Article
Abstract Flat income tax has become increasingly popular recently, yet its implementation is limited mainly to countries in Eastern Europe. One may,argue that ‡at tax receives less political sup- port in countries with a well-established middle,class due to its distributional e¤ects. The aim of this paper is to provide an empirical analysis of the...
Article
The flat tax idea is becoming increasingly popular, especially in transition countries in Eastern Europe. The introduction of a flat tax is supposed to have several advantages. However, flat taxes can have a serious drawback in terms of their impact on the distribution of tax burdens. The aim of this paper is to analyse the effects of flat tax refo...
Article
Full-text available
This paper employs micro-level data to uncover the factors that determine individuals' decision to engage in payroll and/or income tax evasion in Estonia. Using cross-section data and modern microeconometric methods, we estimate the marginal effects on tax evasion of different individual characteristics. To increase the reliability of our results,...
Article
Full-text available
Oktoober 2008 Käesolevas uuringus analüüsitakse leibkondade maksukoormust ja selle jaotust aastatel 2000-2007. Vaatluse all on sotsiaalmaks, üksikisiku tulumaks, käibemaks, alkoholi-ja tubakatoodete aktsiis, kütuse-ja elektriaktsiis ning maamaks. Lisaks analüüsitakse, kes saavad kasu mitmesugustest soodustustest ja eranditest ning kes on võitjad ja...

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Projects

Project (1)
Archived project
Around 25% of Estonian construction companies under-declare their salaries to avoid paying tax. In most such cases, about half of the salary is paid “officially” and the other half goes undeclared. In collaboration with the Estonian Tax and Customs Board (TCB), we aimed to increase the payroll taxes paid by the employers in the construction industry.