Financial incentives to work in the context of a complex reform package and growing wages: the Polish experience 2005–2011

Michal Myck, Adrian Domitrz, Leszek Morawski and Aneta Semeniuk
Additional contact information
Adrian Domitrz: Centre for Economic Analysis, CenEA
Aneta Semeniuk: Centre for Economic Analysis, CenEA

Baltic Journal of Economics, 2015, vol. 15, issue 2, 99-121

Abstract: We examine the consequences of changes in work incentives in Poland between 2005 and 2011 resulting from a complex tax and benefit reform package and substantial real wage growth. While marginal and participation tax rates (PTRs) in the majority of analysed cases fall as a result of the introduced reforms, the conclusions from looking at replacement rates (RRs) for the population eligible for means tested benefits are generally different. These suggest that despite significant tax giveaways incentives on the labour market weakened for families with children and for those eligible to safety net benefits. Yet despite these negative policy implications, we show that work incentives improved substantially over the period due to significant real wage growth. When analysing the effect of the reforms on financial incentives to work, we often find conflicting conclusions when using the PTRs and RRs to reflect financial attractiveness of employment. This is not necessarily surprising, but serves as a note of caution on the use of each of them independently.

Keywords: work incentives; tax and benefit reforms; microsimulation (search for similar items in EconPapers)
JEL-codes: J21 J38 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.tandfonline.com/doi/pdf/10.1080/1406099X.2015.1124227 (application/pdf)

Related works:
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:bic:journl:v:15:y:2015:i:2:p:99-121

Access Statistics for this article

More articles in Baltic Journal of Economics from Baltic International Centre for Economic Policy Studies Contact information at EDIRC.
Bibliographic data for series maintained by Anna Zasova ().