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Family labor supply and proposed tax reforms in the Netherlands

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Author Info
Soest, A. van
Das, M. (Tilburg University, Center for Economic Research)

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Abstract

This paper presents a discrete choice static neo-classical labor supply model for married or cohabiting couples in the Netherlands. The model simultaneously explains the participation decision and the desired number of hours worked. Due to its discrete nature, institutional details of the tax system can be fully incorporated. The model is estimated using Dutch cross-section data. The results are used to simulate the first order labor supply effects of proposed reforms of the Dutch income tax system. In particular, it is shown that some of the proposed reforms would have a negative effect on the number of married females who prefer a small part-time job. This pitfall is avoided in the final proposal which has gone to parliament.

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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 20.

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Date of creation: 2000
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Handle: RePEc:dgr:kubcen:200020

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Moffitt, Robert, 1984. "The Estimation of a Joint Wage-Hours Labor Supply Model," Journal of Labor Economics, University of Chicago Press, vol. 2(4), pages 550-66, October. [Downloadable!] (restricted)
  2. Moffitt, Robert, 1986. "The Econometrics of Piecewise-Linear Budget Constraints: A Survey and Exposition of the Maximum Likelihood Method," Journal of Business & Economic Statistics, American Statistical Association, vol. 4(3), pages 317-28, July.
  3. Hausman, Jerry A, 1985. "The Econometrics of Nonlinear Budget Sets," Econometrica, Econometric Society, vol. 53(6), pages 1255-82, November. [Downloadable!] (restricted)
  4. Blundell, Richard & Walker, Ian, 1986. "A Life-Cycle Consistent Empirical Model of Family Labour Supply Using Cross-Section Data," Review of Economic Studies, Blackwell Publishing, vol. 53(4), pages 539-58, August. [Downloadable!] (restricted)
  5. Euwals, Rob & van Soest, Arthur, 1999. "Desired and actual labour supply of unmarried men and women in the Netherlands," Labour Economics, Elsevier, vol. 6(1), pages 95-118, March. [Downloadable!] (restricted)
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  6. Moffitt, Robert, 1990. "The Econometrics of Kinked Budget Constraints," Journal of Economic Perspectives, American Economic Association, vol. 4(2), pages 119-39, Spring. [Downloadable!] (restricted)
  7. David Card, 1991. "Intertemporal Labor Supply: An Assessment," NBER Working Papers 3602, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Macurdy, T. & Green, D. & Paarsch, H., 1990. "Assessing Empirical Approaches For Analyzing Taxes And Labor Supply," Papers e-90-11, Stanford - Hoover Institution.
  9. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January. [Downloadable!] (restricted)
  10. Apps, P.F. & Rees, R., 1993. "Labor Supply, Household Production and Intra-Family Welfare Distribution," Papers 248, Australian National University - Department of Economics.
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  11. Blomquist, N. Soren, 1983. "The effect of income taxation on the labor supply of married men in Sweden," Journal of Public Economics, Elsevier, vol. 22(2), pages 169-197, November. [Downloadable!] (restricted)
  12. Heckman, James J, 1993. "What Has Been Learned about Labor Supply in the Past Twenty Years?," American Economic Review, American Economic Association, vol. 83(2), pages 116-21, May. [Downloadable!] (restricted)
  13. Hausman, Jerry & Ruud, Paul, 1984. "Family Labor Supply with Taxes," American Economic Review, American Economic Association, vol. 74(2), pages 242-48, May. [Downloadable!] (restricted)
  14. Killingsworth, Mark R. & Heckman, James J., 1987. "Female labor supply: A survey," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 2, pages 103-204 Elsevier. [Downloadable!] (restricted)
  15. Van Soest, A., 1992. "Discrete Choice Models of Family Labour Supply," Papers 9214, Tilburg - Center for Economic Research.
  16. Jerry A. Hausman & Paul Ruud, 1984. "Family Labor Supply With Taxes," NBER Working Papers 1271, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  17. Dickens, William T & Lundberg, Shelly J, 1993. "Hours Restrictions and Labor Supply," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(1), pages 169-92, February. [Downloadable!] (restricted)
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  18. Ilmakunnas, Seija & Pudney, Stephen, 1990. "A model of female labour supply in the presence of hours restrictions," Journal of Public Economics, Elsevier, vol. 41(2), pages 183-210, March. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Peichl, Andreas, 2008. "The Benefits of Linking CGE and Microsimulation Models: Evidence from a Flat Tax Analysis," IZA Discussion Papers 3715, Institute for the Study of Labor (IZA). [Downloadable!]
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  2. Schaefer, Thilo & Peichl, Andreas & Fuest, Clemens, 2007. "Is a Flat Tax politically feasible in a grown-up Welfare State?," FiFo-CPE Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 07-6, University of Cologne, CPE - Cologne Center for Public Economics. [Downloadable!]
  3. Bargain O & Orsini K, 2006. "Beans For Breakfast? How Exportable Is The British Workfare Model?," EUROMOD Working Papers EM2/06, EUROMOD at the Institute for Social and Economic Research. [Downloadable!]
    Other versions:
  4. Flood, Lennart & Hansen, Jörgen & Wahlberg, Roger, 2003. "Household Labour Supply and Welfare Participation in Sweden," CEPR Discussion Papers 3905, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  5. Michael Gerfin & Robert E. Leu, 2003. "The Impact of In-Work Benefits on Poverty and Household Labour Supply. A simulation study for Switzerland," Diskussionsschriften dp0304, Universitaet Bern, Departement Volkswirtschaft. [Downloadable!]
    Other versions:
  6. Bosch, Nicole & Deelen, Anja & Euwals, Rob, 2008. "Is Part-time Employment Here To Stay? Evidence from the Dutch Labour Force Survey 1992–2005," IZA Discussion Papers 3367, Institute for the Study of Labor (IZA). [Downloadable!]
  7. Olivier Bargain, 2004. "On modeling household labor supply with taxation," DELTA Working Papers 2004-14, DELTA (Ecole normale supérieure). [Downloadable!]
    Other versions:
  8. Flood, Lennart & Pylkkänen, Elina & Wahlberg, Roger, 2003. "From Welfare to Work: Evaluating a Proposed Tax and Benefit Reform Targeted at Single Mothers in Sweden," IZA Discussion Papers 891, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  9. José M. Labeaga, Xisco Oliver & Xisco Oliver & Amedeo Spadaro, . "Discrete choice models of labour Supply, behavioural microsimulation and the Spanish tax reforms," Working Papers 2005-14, FEDEA. [Downloadable!]
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  10. Tim Callan & A. Van Soest & John R. Walsh, 2007. "Tax Structure and Female Labour Market Participation: Evidence from Ireland," Papers WP208, Economic and Social Research Institute (ESRI). [Downloadable!]
    Other versions:
  11. Clemens Fuest & Andreas Peichl & Thilo Schaefer, 2008. "Is a flat tax reform feasible in a grown-up democracy of Western Europe? A simulation study for Germany," International Tax and Public Finance, Springer, vol. 15(5), pages 620-636, October. [Downloadable!] (restricted)
  12. John Creedy & Guyonne Kalb, 2001. "Measuring Welfare Changes With Nonlinear Budget Constraints in Continuous and Discrete Hours Labour Supply Models," Melbourne Institute Working Paper Series wp2001n09, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
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  13. Clemens Fuest & Andreas Peichl & Thilo Schaefer, 2007. "Is a Flat Tax Feasible in a Grown-up Welfare State?," IZA Discussion Papers 3142, Institute for the Study of Labor (IZA). [Downloadable!]
  14. Soest, A. van & Das, M. & Gong, X., 2000. "A structual labour supply model with nonparametric preferences," Discussion Paper 60, Tilburg University, Center for Economic Research. [Downloadable!]
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  15. François Bourguignon & Amedeo Spadaro, 2005. "Microsimulation as a tool for evaluating redistribution policies," PSE Working Papers 2005-02, PSE (Ecole normale supérieure). [Downloadable!]
    Other versions:
  16. Olivier Bargain & Kristian Orsini, 2004. "In-work policies in Europe: killing two birds with one stone?," DELTA Working Papers 2004-13, DELTA (Ecole normale supérieure). [Downloadable!]
    Other versions:
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