Getting the por to work three welfare - increasing reforms for a busy Germany Robin Jessen, Davud Rostam - Afschar and Viktor Steiner
By: Jessen, Robin
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Contributor(s): Rostam Afschar, Davud | Steiner, Viktor.
Material type: 
ArticlePublisher: 2017Subject(s): RENTAS BAJAS | RENTA BÁSICA | TIPO LINEAL | IMPUESTOS | POBREZA | ALEMANIA | MODELOS DE SIMULACIÓN
In:
FinanzArchiv v. 73, n. 1, March 2017, p. 1-41Summary: We study three budget-neutral reforms of the German tax and transfer system designedto improve work incentives for people with low incomes: a feasible flat tax reform thatprovides a basic income equal to the current level of the means-tested unemploymentbenefit, and two alternative reforms that involve employment subsidies to stimulateparticipation and full-time work, respectively. We estimate labor supply reactions andwelfare effects using a microsimulation model based on household data from the Socio-Economic Panel and a structural labor supply model. We find that all three reforms increaselabor supply in the first decile of the income distribution. The flat tax scenario reduces overall labor supply by about 5%; the reform designed to increase participation reduces labor supply by 1%; the reform that provides incentives to work full-time has negligible effects on overall labor supply. With equal welfare weights, aggregate welfare gains are realizable under all three reforms.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| IEF | OP 207/2017/1-1 (Browse shelf) | Available | OP 207/2017/1-1 |
Disponible también en línea a través de la Biblioteca del Instituto de Estudios Fiscales. Resumen. Conclusión. Bibliografía.
We study three budget-neutral reforms of the German tax and transfer system designedto improve work incentives for people with low incomes: a feasible flat tax reform thatprovides a basic income equal to the current level of the means-tested unemploymentbenefit, and two alternative reforms that involve employment subsidies to stimulateparticipation and full-time work, respectively. We estimate labor supply reactions andwelfare effects using a microsimulation model based on household data from the Socio-Economic Panel and a structural labor supply model. We find that all three reforms increaselabor supply in the first decile of the income distribution. The flat tax scenario reduces overall labor supply by about 5%; the reform designed to increase participation reduces labor supply by 1%; the reform that provides incentives to work full-time has negligible effects on overall labor supply. With equal welfare weights, aggregate welfare gains are realizable under all three reforms.
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