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Is Belgium 'making work pay'?

Kristian Orsini ()

Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: In the period 2001-2004 two major reforms followed in Belgium: a personal income tax reform (2001) and a reform of social security contributions for low skilled employees (2004). Using a discrete hours labor supply model, this paper assesses the impact of these reforms on aggregate labor supply of males and females in couples. Results suggest that the reforms had a positive (but moderate) effect on both participation and hours worked. Targeted reductions in social security contributions, however, proved to be more effective than the newly introduced tax credit on low earnings.

Keywords: Tax-benefit; Systems; ; Microsimulation; ; Household; Labour; Supply; ; Multinomial; Logit. (search for similar items in EconPapers)
JEL-codes: D31 H21 H23 H24 H31 J22 (search for similar items in EconPapers)
Date: 2006-03
New Economics Papers: this item is included in nep-lab
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Journal Article: Is Belgium "Making Work Pay" ? (2007) Downloads
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