Giangregorio, Luca2024-01-092024-01-092022Giangregorio L. Welfare type and income inequality: an income source decomposition including in‑kind benefits and cash‑transfers entitlement. Int Tax Public Financ. 2024;31:367-403. DOI: 10.1007/s10797-022-09772-80927-5940http://hdl.handle.net/10230/58646This paper aims to understand whether a shift towards a more balanced cash transfer and service-based welfare system is valuable in terms of reducing income inequality and what factors mostly contribute to the income inequality evolution. To examine this, I first impute the monetary values of in-kind benefits and then reassess Gini coefficients across countries and welfare regimes. I also compare the role of cash transfers by functions and, more importantly, by how they are allocated. By means of factor source decomposition, the elasticities confirm wages as being the income source that creates most inequalities, while taxes play the most equalising role together with cash transfers. However, universal services such as healthcare and compulsory education outperform most of the cash transfers included in the analysis, with a stronger effect in the Mediterranean countries. Although in-kind services play a marginal role in explaining the changes in the Gini coefficient between 2008 and 2017, results suggest that a coordinated view of cash transfers and public services, as well as increasing the share of non-contributory means tested transfers, can reduce income inequality in all welfare regimes.application/pdfeng© The Author(s) 2022 This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http:// creat iveco mmons. org/ licenses/ by/4. 0/.info:eu-repo/semantics/articlehttp://dx.doi.org/10.1007/s10797-022-09772-8Cash transfersIncome inequalityInequality measurementIn-kind beneftsWelfare provisioninfo:eu-repo/semantics/openAccess