The Redistributive Impact of Alternative Income Maintenance Schemes: A Microsimulation Study using Swiss Data
AbstractTaking a benchmark scenario, the current situation in Switzerland, and using a microsimulation technique, we compare the effectiveness of various income maintenance schemes for reducing inequality and poverty. A full negative income tax allowance designed to eliminate poverty, is shown to reduce income inequality most drastically. An integrated federal linear tax rate of 62% is required to make it viable. Aggregate work hours are reduced by approximately 10% and average disposable income falls by 9.3% under such circumstances. A participation income restricted to adults in employment and covering 50% of subsistence costs is however shown to result in an unambiguous social welfare improvement over the current situation in Switzerland. (Revised in July 2007)
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Bibliographic InfoPaper provided by Département des Sciences Économiques, Université de Genève in its series Research Papers by the Department of Economics, University of Geneva with number 2004.11.
Length: 51 pages
Date of creation: Jul 2004
Date of revision:
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income maintenance; negative income tax; microsimulation; income redistribution;
Other versions of this item:
- Ramses H. Abul Naga & Christophe Kolodziejczyk & Tobias Müller, 2008. "The Redistributive Impact Of Alternative Income Maintenance Schemes: A Microsimulation Study Using Swiss Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(2), pages 193-219, 06.
- Abul Naga Ramses & Kolodziejczyk Christophe & Muller Tobias, 2007. "The Redistributive Impact of Alternative Income Maintenance Schemes: A Microsimulation Study using Swiss Data," Research Papers by the Department of Economics, University of Geneva 2007.03, Département des Sciences Économiques, Université de Genève.
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-10-18 (All new papers)
- NEP-CMP-2004-10-18 (Computational Economics)
- NEP-PBE-2004-10-18 (Public Economics)
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