A view on income redistribution in Portugal and in the European Union

This article assesses the impact and effi ciency of redistributive policies in Portugal and in the European Union. The analysis is based on microdata from EU-SILC 2010 and focuses on the role of cash benefi ts (excluding pensions) and income taxes. The Portuguese economy has a high level of income inequality in the context of the European Union and a degree of redistribution close to the European average. In terms of effi ciency, the evidence suggests that cash benefi ts (excluding pensions) in Portugal are relatively well targeted towards the lower income levels and income taxes have a higher degree of progressivity compared to the European average. The analysis also highlights the heterogeneity of the redistributive process in the various income deciles in Portugal.