Work incentives across the income distribution and for model families in Lithuania: 2005–2013
Authors
Jekaterina Navicke, Romas Lazutka
Publication Date
Nov 2016
Summary
The aim of this paper is to evaluate the impact of cash social benefits on work incentives across the income distribution and among selected model family types in Lithuania. The analysis of work incentives was carried out for 2005–2013 based on a combination of measures estimated using the EUROMOD tax–benefit microsimulation model. The analysis revealed high disincentives to work at the bottom of the income distribution, dominated by the effect of cash social benefits compared to taxes or social insurance contributions. A strong trade-off between benefit adequacy and work incentives is built into the design of the national cash benefit system, particularly social assistance. The challenge for policy design is thus to encourage active labour market participation among low earners without eroding the minimum income protection floor.
Volume and page numbers
Volume: 16 , p.175 -191
DOI
http://dx.doi.org/10.1080/1406099X.2016.1205407
Publication type
Journal Article
Research areas
Family and gender, Tax and benefit systems
Notes
© 2016 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group; Open Access; This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/ licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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