Taxation and Labor Force Participation: The Case of Italy

Colonna, Fabrizio; Marcassa, Stefania

doi:10.2139/ssrn.2303708

Cited by 11 publications

(13 citation statements)

References 29 publications

(26 reference statements)

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“…Analysis of labour supply effects by income levels suggests that for both singles and couples, the IWB schemes would have larger labour supply effects in the case of low-wage earners than for those with high incomes, which implies that these schemes would be beneficial from poverty and inequality reduction perspectives as well. This is consistent with the findings in other studies (Colonna & Marcassa, 2013;Figari, 2015), and represents an important finding for Serbia, given that the country has one of the highest Gini coefficients in Europe (Eurostat 2019b). Since the FIWB would perform better in terms of the labour supply of low income singles, while the IIWB would perform better in terms of the labour supply of low income couples, the overall effect on the change in income distribution would be almost equal under both programs.…”

Section: Labour Supply Effectssupporting

confidence: 92%

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Labour Supply and Inequality Effects of In-Work Benefits: Evidence from Serbia

Ranđelović

Rakić

Vladisavljević

et al. 2019

Naše Gospodarstvo/Our Economy

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Low labour market participation, together with the high effective tax wedge at low wage levels, create a fertile ground for the introduction of the in-work benefits (IWB) in Serbia. Our paper provides an ex-ante evaluation of the two IWB schemes, directed at stimulating the labour supply and more equal income distribution. The methodological approach combines the tax-and-benefit microsimulation model with the discrete labour supply model. Our results show that both individual and family-based IWB schemes would considerably boost labour market participation, although family-based benefits would have disincentivizing effects for the secondary earners in couples. Most of the behavioural changes take place among the poorest individuals, with significant redistributive effects.

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Section: Labour Supply Effectssupporting

confidence: 92%

“…Similar results for Italy, especially for couples with children, are found in De Luca et al 2013. Colonna & Marcassa (2013) show that the working tax credit in Italy boosts the labour force participation rate, particularly among unskilled and low-educated women.…”

Section: In-work Benefits Objective Design and Labour Supply Effectsmentioning

confidence: 97%

Labour Supply and Inequality Effects of In-Work Benefits: Evidence from Serbia

Ranđelović

Rakić

Vladisavljević

et al. 2019

Naše Gospodarstvo/Our Economy

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“…Embodied in the personal income taxation system there are tax credits and child benefits that can also be classified as anti-poverty policies. It has been observed, however, that the design of the mean-tested tax credits and child benefits create distortions and bad incentives for labour market participations of married women (Colonna and Marcassa 2012). None of the above policies is universal: for example, Cassa Integrazione and Assegno per il Nucleo Familiare are limited to wage employees.…”

Section: Introductionmentioning

confidence: 99%

Five Crossroads on the Way to Basic Income. An Italian Tour

Colombino

2015

Ital Econ J

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The current Italian income support policies are defective with respect to efficiency and equity. A reform must face five crucial choices: universal vs. categorical policies; transfers vs. subsidies; unconditional vs. means-tested policies; coverage; flat vs. progressive tax rules. Using a microeconometric model and a social welfare methodology, we simulate-under fiscal neutrality and market equilibrium-the effects of 30 policies obtained from three basic types: conditional basic income, unconditional basic income and wage subsidies. The alternative reforms are evaluated according to four different social welfare criterion: the pure utilitarian and three different versions of a Gini-type social welfare function. The pure utilitarian criterion favours reforms based on a wage subsidy or a combination of wage subsidies and transfers. The Gini-type criteria favour unconditional transfers or combinations of wage subsidies with unconditional transfers. Most of the reforms turn out to be preferable to the current system: the choice set available for selecting a "best" reform given different criteria is very large.

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“…Differently from earlier ex-ante evaluations of in-work benefits for Italy (Colonna and Marcassa 2011;Figari 2011), our policy simulations focus on EITC and WTC in-work benefits for Italian married couples with a special emphasis on the new benefit premium for two-earner households. Policy reforms are simulated under budget neutrality by considering the abolition of Italian family allowances (FA).…”

Section: Introductionmentioning

confidence: 99%

In-work benefits for married couples: an ex-ante evaluation of EITC and WTC policies in Italy

2014

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Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. 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. JEL classification: I38; H31; H53

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Taxation and Labor Force Participation: The Case of Italy

Cited by 11 publications

References 29 publications

Labour Supply and Inequality Effects of In-Work Benefits: Evidence from Serbia

Labour Supply and Inequality Effects of In-Work Benefits: Evidence from Serbia

Five Crossroads on the Way to Basic Income. An Italian Tour

In-work benefits for married couples: an ex-ante evaluation of EITC and WTC policies in Italy

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