Do generous welfare benefits reduce income inequality? Do they have an effect on the employment rate?

In France, a debate is now underway on reducing welfare benefits. Opponents point to the rise in inequality that would result from a reduction in these benefits. Proponents point to the fact that generous benefits are an impediment to getting jobseekers back into work and have to be financed , which can create other inefficiencies. Across OECD countries, we compare the size of welfare benefits and: Income inequality before and after redistribution; The employment rate. We find that: Welfare benefits are high when income inequality before redistribution is high, and sharply reduce income inequality; But they are financed by a high corporate tax burden (especially high social contributions), which reduce s the employment rate. Benefits therefore correct the income inequality that they help to create by reducing the employment rate.