Abstract
Equivalence scales make adjustments to the incomes of households so that households with different compositions can be analysed. The effects of taxes and benefits on household income (ETB) analysis uses the McClements equivalence scale to examine how taxes and benefi ts redistribute income between households in the UK. However, many other household income statistics, including indicators published by the Department for Work and Pensions and the European Union (EU), use the Organisation for Economic Cooperation and Development (OECD) equivalence scale. Thus, estimates produced in the ETB analysis cannot be easily compared with other key income statistics. This article seeks to outline the effects of switching to the OECD equivalence scale on the effects of taxes and benefits on household income analysis.
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