Chart Detail

Extent to which taxes and transfer programs reduce the relative poverty rate, selected OECD countries, late 2000s

Note: This figure plots the differences between each country's pre– and post–tax-and-transfer relative poverty rate, where relative poverty is the share of individuals with income below half of household-size-adjusted median income.

Source: Authors' analysis of Organisation for Economic Co-operation and Development Stat Extracts (data group labelled "late 2000s")

Updated July 10, 2012

Documentation and methodology

Underlying data are from the Organisation for Economic Co-operation and Development’s Stat Extracts public data series. Household-size-adjusted income, or equivalent income, is household income divided by the square root of the household size. We chose countries based on their productivity per worker hour using the “PPP Converted GDP Laspeyres Per Hour Worked by Employees at 2005 Constant Prices” series from Penn World Table Version 7.0 (Heston, Summers, and Aten 2011), and excluded countries whose productivity is less than half that of the United States.

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