Behavioural Microsimulation and Female Labour Supply in Luxembourg
AbstractIn this study, the females’ labour supply is modelled as a discrete choice problem assuming that preference for leisure and consumption can be described by a quadratic utility function which allows for non-convexities in the budget set. As far as we know, such a model has never been developed in Luxembourg. We assess females’ behavioural responses to the significant changes in the tax-benefit system during 2001-2002 in Luxembourg. Only moderate impact is found, on average, on the efficiency of the economy as measured by the labour supply effects. The impact is indeed concentrated on richer single women. These increase significantly their labour force which more than doubles the non-behavioural effect of the tax reform on disposable income and boosts the gains in well-being for that part of population.
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Bibliographic InfoArticle provided by ULB -- Universite Libre de Bruxelles in its journal Brussels economic review.
Volume (Year): 54 (2011)
Issue (Month): 4 ()
Labour Supply; Discrete choice; Households; Microsimulation; Tax reform;
Find related papers by JEL classification:
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
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- Liégeois, Philippe & Islam, Nizamul, 2013. "Dealing with negative marginal utilities in the discrete choice modeling of labor supply," Economics Letters, Elsevier, vol. 118(1), pages 16-18.
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