@techreport{Bargain2004Normative,
abstract = {In this paper, we analyze the impact of a tax policy change on social welfare by using jointly a
collective model of household labor supply and a microsimulation program of the French taxbenefit
system. The collective approach allows studying the intrahousehold distribution so
that for the first time, social welfare can be characterized using individual utilities rather than
an ambiguous concept of household welfare. This way, the planner?s preferences address
not only inter-household inequalities but also intra-household inequalities often neglected in
the literature. The other contribution of the paper derives from a larger interpretation of labor
supply behaviors which represent more than the simple work duration and incorporate
unobserved dimensions related to effort or intensity at work. We simulate an extended
version of the British Working Family Tax Credit on married couples in France. Two types of
conclusions emerge. First, the reform is not desirable for low values (utilitarian) or high
values (rawlsian) of the social inequality aversion but rather for an intermediary range. In
effect, on the efficiency side, the reform induces strong disincentive effects on the
participation of second-earners while on the equity side, it does not specifically target the
poorest households. Second, we show that the choice of unit \textendash{} household or individual \textendash{} strongly condition the results of the normative analysis when departing in a reasonable way
from the assumption of equal sharing within the household.},
author = {Olivier Bargain},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {C71; H31; D31; J22; H21; D63; D13; 330; collective model; intrahousehold distribution; social welfare; household labor supply; microsimulation; tax reform; Steuersystem; Sozialtransfer; Haushalts\"{o}konomik; Steuerreform; Wohlfahrtseffekt; Frankreich},
language = {eng},
number = {1441},
title = {Normative Evaluation of Tax Policies : From Households to Individuals},
type = {IZA Discussion paper series},
url = {http://hdl.handle.net/10419/20740},
year = {2004}
}
