TY - UNPD A1 - Haan, Peter A1 - Kemptner, Daniel A1 - Prowse, Victoria A1 - Schaller, Maximilian T1 - Insurance, Redistribution, and the Inequality of Lifetime Income T2 - Berlin School of Economics Discussion Papers N2 - Individuals vary considerably in how much they earn during their lifetimes. This study examines the role of the tax-and-transfer system in mitigating such inequalities, which could otherwise lead to disparities in living standards. Utilizing a life-cycle model, we determine that taxes and transfers offset 45% of lifetime earnings inequality attributed to differences in productive abilities and education. Additionally, the system insures against 48% of lifetime earnings risk. Implementing a lifetime tax reform linking annual taxes to previous employment could improve the system’s insurance capabilities, albeit at the cost of a lower employment rate. T3 - Berlin School of Economics Discussion Papers - 28 KW - Economics Y1 - 2023 UR - https://opus4.kobv.de/opus4-hsog/frontdoor/index/index/docId/5112 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-51126 UR - https://berlinschoolofeconomics.de/insights/bse-discussion-papers ET - No. 28 ER -