Abstract:The Netherlands witnessed major reforms in income support for lone parents over the past decade. The goals of these reforms were to improve the financial incentives to work and to simplify the system. We consider whether the new system can be considered (closer to) 'optimal'. We employ the inverse-optimal method of optimal taxation to recover the implicit social welfare weights before and after the reforms. Before the reforms, the social welfare weights are not monotonically declining in income. After the refo… Show more
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