Welfare reform in European countries: a micro-simulation analysis

Authors

Herwig Immervoll, Henrik Jacobsen Kleven, Claus Thustrup Kreiner, Emmanuel Saez

Publication Date

Jun 2007

Summary

This article compares the effects of increasing traditional welfare to introducing in-work benefits in the 15 (pre-enlargement) countries of the European Union. We use a labour supply model encompassing responses to taxes and transfers along both the intensive and extensive margins, and the EUROMOD microsimulation model to estimate current marginal and participation tax rates. We quantify the equity-efficiency trade-off for a range of elasticity parameters. In most countries, because of large existing welfare programmes with high phase-out rates, increasing traditional welfare is undesirable unless the redistributive tastes of the government are extreme. In contrast, the in-work benefit reform is desirable in a very wide set of cases.

Volume and page numbers

Volume: 117 , p.1 -44

DOI

http://dx.doi.org/10.1111/j.1468-0297.2007.02000.x

Publication type

Journal Article

Research areas

Population changes and labour market dynamics, Tax and benefit systems

Links

http://serlib0.essex.ac.uk/record=b1597352~S5

Notes

Albert Sloman Library Periodicals *restricted to Univ. Essex registered users*

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Related Publications

• Welfare reform in European countries: a micro-simulation analysis

  Herwig Immervoll, Henrik Jacobsen Kleven, Claus Thustrup Kreiner, Emmanuel Saez, Research Paper -01 Jun 2005

• Welfare reform in European countries: a micro-simulation analysis

  Herwig Immervoll, Henrik Jacobsen Kleven, Claus Thustrup Kreiner, Emmanuel Saez, EUROMOD Working Paper Series -01 Feb 2004

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