Hypothetical Tax-Benefit Reforms in Hungary: Shifting from Tax Relief to Cash Transfers for Family Support

Ana Agúndez García and Michael Christl

Eastern European Economics, 2023, vol. 61, issue 6, 723-746

Abstract: This paper evaluates two hypothetical budget-neutral reforms that shift resources from family tax expenditures to family cash transfers. We evaluate these reforms using a structural labor supply model based on the microsimulation EUROMOD model and EU-SILC data. We find that both reforms have an inequality-decreasing impact. However, when looking at labor supply responses for different household types, we show that the reforms have a non-negligible impact, especially for females in couple households. Additionally, we show that females in the middle of the income distribution in particular reduce labor supply in response to the reforms.

Date: 2023
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Related works:
Working Paper: Hypothetical tax-benefit reforms in Hungary: Shifting from tax relief to cash transfers for family support (2023)
Working Paper: Hypothetical tax-benefit reforms in Hungary: shifting from tax reliefs to cash transfers for family support (2023)
Working Paper: Hypothetical tax-benefit reforms in Hungary: Shifting from tax relief to cash transfers for family support (2023)
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DOI: 10.1080/00128775.2023.2221231

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