The Redistributive Impact of Alternative Income Maintenance Schemes: A Microsimulation Study using Swiss Data

Ramses H. Abul Naga, Christophe Kolodziejczyk and Muller Tobias

Cahiers du Département d'Econométrie from Département d'Econométrie, Université de Genève

Abstract: Taking a benchmark scenario, the current situation in Switzerland, and using a microsimulation technique, we compare the effectiveness of various income maintenance schemes for reducing inequality and poverty. A full negative income tax allowance designed to eliminate poverty, is shown to reduce income inequality most drastically. An integrated federal linear tax rate of 62% is required to make it viable. Aggregate work hours are reduced by approximately 10% and average disposable income falls by 9.3% under such circumstances. A participation income restricted to adults in employment and covering 50% of subsistence costs is however shown to result in an unambiguous social welfare improvement over the current situation in Switzerland.

Keywords: income maintenance; negative income tax; microsimulation; income redistribution (search for similar items in EconPapers)
JEL-codes: I38 H22 H31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp
Date: 2007-07

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Related works:
Working Paper: The Redistributive Impact of Alternative Income Maintenance Schemes: A Microsimulation Study using Swiss Data (2004)
Journal Article: THE REDISTRIBUTIVE IMPACT OF ALTERNATIVE INCOME MAINTENANCE SCHEMES: A MICROSIMULATION STUDY USING SWISS DATA (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:gen:geneem:2007.03

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