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 Institut d'Economie et Econométrie, Université de Genève in its series Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, 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 Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 2007.03, Institut d'Economie et Econométrie, 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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