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Increasing labour market activity of the poor and females: Let’s make work pay in Macedonia

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  • Blazevski, Nikica Mojsoska
  • Petreski, Marjan
  • Petreska, Despina

Abstract

The objective of this paper is to simulate the effects of two alternative social policies – individual and family in-work benefits – on labour market choices in Macedonia, with special focus on the poor and females. To that end, we use ex-ante analysis relying on a combination of a tax and benefit micro-simulation model for Macedonia (MAKMOD) and a structural model for labour supply, both utilising the 2011 Survey of Income and Labour Conditions. Results suggest that the proposed reforms will have a considerable effect on the working choices of Macedonians. The family in-work benefit is found to be more effective for singles and would potentially increase employment by 6 percentage points. On the other hand, the individual in-work benefit works better for couples where employment would increase by 2.5 percentage points. In addition, the effects are found to be larger for the poor and for females, the categories that are most prone to inactivity in Macedonia.

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Paper provided by EUROMOD at the Institute for Social and Economic Research in its series EUROMOD Working Papers with number em16/13.

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Date of creation: 31 Oct 2013
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Publication status: published
Handle: RePEc:ese:emodwp:em16-13

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  1. Bargain, Olivier & Orsini, Kristian, 2006. "In-work policies in Europe: Killing two birds with one stone?," Labour Economics, Elsevier, Elsevier, vol. 13(6), pages 667-697, December.
  2. Giuseppe De Luca & Claudio Rossetti & Daniela Vuri, 2012. "In-Work Benefits for Married Couples: An Ex-Ante Evaluation of EITC and WTC Policies in Italy," CEIS Research Paper, Tor Vergata University, CEIS 244, Tor Vergata University, CEIS, revised 23 Jul 2012.
  3. Richard Blundell & Alan Duncan & Julian McCrae & Costas Meghir, 2000. "The labour market impact of the working families’ tax credit," Fiscal Studies, Institute for Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 75-103, March.
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