Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/62396
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dc.contributor.authorDe Luca, Giuseppeen_US
dc.contributor.authorRossetti, Claudioen_US
dc.contributor.authorVuri, Danielaen_US
dc.date.accessioned2012-08-01en_US
dc.date.accessioned2012-09-14T11:05:20Z-
dc.date.available2012-09-14T11:05:20Z-
dc.date.issued2012en_US
dc.identifier.urihttp://hdl.handle.net/10419/62396-
dc.description.abstractThis paper investigates labor supply and redistributive effects of in-work benefits for Italian married couples using a tax-benefit microsimulation model and a multi-sectoral discrete choice model of labor supply. We consider two in-work benefit schemes following the key principles of the Earned Income Tax Credit (EITC) and the Working Tax Credit (WTC) existing in the US and the UK, respectively. The standard design of these in-work benefits is however augmented with a new benefit premium for two-earner households in order to overcome the well-known disincentive effects that these welfare instruments may generate on secondary earners. In simulation, the proposed in-work benefits are financed through the abolition of Italian family allowances for dependent employees and contingent workers thus ensuring tax revenue neutrality. We show that our EITC and WTC reforms have strong positive effects on labor supply of wives, weak negative effects on labor supply of husbands, and strong positive effects on equity. The EITC is more effective than the WTC in boosting employment of wives, while the WTC is more effective than the EITC in fighting poverty. In both schemes, the trade-off between labor supply incentives and redistributive effects is crucially related to the new benefit premium for two-earner households. Other things being equal, tax revenue neutrality implies that a higher value of this policy coefficient yields stronger incentive effects and weaker redistributive effects.en_US
dc.language.isoengen_US
dc.publisher|aInstitute for the Study of Labor (IZA) |cBonnen_US
dc.relation.ispartofseries|aDiscussion Paper series, Forschungsinstitut zur Zukunft der Arbeit |x6739en_US
dc.subject.jelI38en_US
dc.subject.jelH31en_US
dc.subject.jelH53en_US
dc.subject.ddc330en_US
dc.subject.keywordin-work benefitsen_US
dc.subject.keywordmulti-sectoral labor supplyen_US
dc.subject.keywordpovertyen_US
dc.subject.keywordmicrosimulationen_US
dc.subject.keywordmarried couplesen_US
dc.subject.keywordItalian tax-benefit systemen_US
dc.subject.stwNegative Einkommensteueren_US
dc.subject.stwAktivierende Sozialhilfeen_US
dc.subject.stwWirkungsanalyseen_US
dc.subject.stwArbeitsangeboten_US
dc.subject.stwArmuten_US
dc.subject.stwEheen_US
dc.subject.stwItalienen_US
dc.titleIn-work benefits for married couples: An ex-ante evaluation of EITC and WTC policies in Italyen_US
dc.typeWorking Paperen_US
dc.identifier.ppn720521386en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US

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