Tax and Benefit Reforms in a Model of Labour Market Transitions
Michal Myck and
Howard Reed
No 625, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research
Abstract:
We present a method for taking advantage of labour market transitions to identify effects of financial incentives on employment decisions. The framework we use is very flexible and by imposing few theoretical assumptions allows extending the modelled sample relative to struc-tural models. We take advantage of this flexibility to include disabled people in the model and to analyse behaviour of disabled and non-disabled people jointly. A great deal of attention is paid to appropriate modelling of financial incentives on the labour market. This in the case of disabled people turns out to be an extremely complex process but one which in the end turns out well worth the effort. The model is used to compare reactions on the labour market to marginal changes in financial incentives and also to model one of the most important reforms of the UK Labour government, the introduction of the Working Families' Tax Credit. The methodology relies on matching transitions and incomes data between cross-sectional and panel surveys, and could be used in other countries where detailed reliable income data are not collected in a panel format.
Pages: 45 p.
Date: 2006
New Economics Papers: this item is included in nep-lab
References: Add references at CitEc
Citations: View citations in EconPapers (7)
Downloads: (external link)
https://www.diw.de/documents/publikationen/73/diw_01.c.44731.de/dp625.pdf (application/pdf)
Related works:
Journal Article: Tax and Benefit Reforms in a Model of Labour Market Transitions (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp625
Access Statistics for this paper
More papers in Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Bibliothek (bibliothek@diw.de).