Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154696
Authors: 
Luca, Giuseppe
Rossetti, Claudio
Vuri, Daniela
Year of Publication: 
2014
Citation: 
[Journal:] IZA Journal of Labor Policy [ISSN:] 2193-9004 [Volume:] 3 [Year:] 2014 [Pages:] 1-24
Abstract: 
This 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 in-work benefits based on 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 income support mechanisms is however augmented with a premium for two-earner households to avoid potential disincentive effects on secondary earners. Revenue neutral policy simulations show that our reforms may greatly improve the current Italian tax-benefit system in terms of both incentive and redistributive effects. Furthermore, neglecting sector-specific attributes of the various job opportunities may lead to overstated estimates of the policy effects.
Subjects: 
In-work benefits
Sectoral labor supply
Poverty
Microsimulation
Married couples
JEL: 
I38
H31
H53
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/2.0/
Document Type: 
Article

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