After the introduction of the Law on Childcare in 2005, childcare subsidies in the Netherlands became much more generous. Public spending on childcare increased from 1 to 3 billion euro over the period 2004-2009. Using a differences-indifferences strategy we find that, despite the substantial budgetary outlay, this reform had only a modest impact on employment. Furthermore, the rather small effects we find are likely confounded by a coincident increase in the EITC for parents with young children of 0.6 billion euro, which presumably also served to increase the labour supply of the group. The joint reform increased the maternal employment rate by 2.3 percentage points (3.0%) and maternal hours worked by 1.1 hours per week (6.2%). The results further suggest that the reform slightly reduced hours worked by fathers.
"This paper explores the economic consequences of proposed EU reforms for a common consolidated corporate tax base. The reforms replace separate accounting with formula apportionment as a way to allocate corporate tax bases across countries. To assess the economic implications, we use a numerical computable general equilibrium (CGE) model for Europe. It encompasses several decision margins of firms such as marginal investment, FDI decisions, and multinational profit shifting. The simulations suggest that consolidation does not yield substantial welfare gains for Europe. The variation of effects across countries is large and depends on the choice of the apportionment formula. Consolidation with formula apportionment does not weaken incentives for tax competition. Tax competition instead offers a rationale for rate harmonization, in addition to base harmonization." Copyright (c) CEPR, CES, MSH, 2010.
We study the extension of an EITC for single mothers in the Netherlands to mothers with a youngest child 12 to 15 years old. This reform increased net income for the treatment group by 5%. Using both DD and RD we show that this reform had a negligible effect on labour participation, with tight confidence intervals around zero. Our results are at odds with a number of related studies. This is likely to be due to their use of single women without children as the control group, which in our case is an invalid control group.JEL codes: C21, H24, J22 2 The former government (Rutte-I) had plans to reverse the policy change of 2002, to reduce the budget deficit (CPB, 2010), but for the moment these plans are on hold.3 Furthermore, we also consider a 'difference-in-discontinuity' analysis, where we allow for a potential pre-reform discontinuity (although we are unaware of a reason to expect a pre-reform discontinuity at the discontinuity we consider). 4 The point estimate of the DD analysis is -0.2%-points with a 95% confidence interval [-1.4,0.9].The point estimate of the RD analysis is -0.4 (where we have reversed the sign of the coefficient since we are measuring the change in the participation rate of single mothers that do not qualify for the subsidy relative to single mothers that do qualify for the subsidy, see below), with a 95% confidence interval [-2.3,1.6].
After World War I rent control became a cornerstone of housing policy in many European countries, resulting in quantity constraints on the demand for housing. The theory on complete demand systems provides a framework for analyzing the effects of these policies on consumption. As a test case, a demand model is estimated to calculate virtual rent prices for interwar Belgium. The results are well in line with historical evidence, providing insight into the extent of rationing Simulations with the demand model show that the severe rent restrictions especially favored expenditures on food.
Inverse demand systems explain price variations as functions of quantity variations. They have properties analogous to those of regular demand systems. There are very few examples of their empirical application. In part this is due to lack of data for which price is the decision variable and the quantity given. The case of fish landed at Belgian sea ports appears to suit an inverse demand system well. A Rotterdam variant of such a system in estimated. Allais interaction intensities have been derived and show a reasonable pattern.
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