Redistribution and Earnings Composition Across Population Subgroups (RECAPS)

Austria ranks among the countries with the lowest levels of income inequality, with a distribution of disposable income that has remained remarkably stable over the past two decades despite substantial socio-demographic and labour market changes. However, recent evidence shows that specific groups – especially young families with children – have seen relative declines in both market and disposable incomes. This project addresses a central paradox: How can overall inequality remain stable while some household types fall behind? We analyse how individual earnings trends, shifts in labour force composition, and changing household structures interact with Austria's tax-benefit system to shape household income distribution. Using decomposition techniques, microsimulation, and linked register and survey data, we investigate how labour market developments, demographic transformations, and redistributive policies have influenced both the evolution and structure of inequality – paying particular attention to underlying shifts obscured by aggregate summary indicators. This will be the first comprehensive analysis to assess the distributional consequences of Austria's demographic and labour market changes in conjunction with the welfare state, offering an integrated view of income distribution changes. The project will thereby contribute substantively to the understanding of inequality and redistribution in Austria.