New post at policy shop. Excerpt:
There are two conceivable paths to having a low post-T&T poverty rate, this again being the rate of most significance to people’s lived lives. A country can put a lot of effort into bringing up the market incomes of low-income people. Or it can compensate for those low market incomes on the back end through taxes and transfers. While there is some of both going on, the overall trend is to do the latter. The 13 countries with the lowest post-T&T poverty rates reduced their poverty by 20.7 percentage points through taxes and transfers. Meanwhile, the 13 countries with the highest post-T&T poverty rates only reduced their poverty by 15.7 percentage points through taxes and transfers.