Is Belgium "Making Work Pay" ?
AbstractIn the period 2001-2004 two major reforms followed in Belgium: a personal income tax reform which included a new tax credit on low earnings (2001) and a reform of social security contributions for low wage employees (2004). Using a discrete hours labor supply model, this paper assesses the impact of these reforms on aggregate labor supply of couples. Results suggest that the reforms had a positive (but moderate) effect on both participation and hours worked. Targeted reductions in social security contributions, nevertheless, proved to be more effective in stimulating aggregate labour supply, whereas the tax credit had a stronger effect on participation.
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Bibliographic InfoArticle provided by ULB -- Universite Libre de Bruxelles in its journal Brussels economic review.
Volume (Year): 50 (2007)
Issue (Month): 2 ()
Tax-benefit Systems; Microsimulation; Household Labour Supply; Multinomial Logit;
Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- 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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