Tax, Welfare, and Pension Reforms in Slovenia: Implications for Work Incentives and Labor Participation
AbstractThe labor participation rate in Slovenia has been lower than in the EU-15 (the members states prior to May 2004), particularly for the low-income and older individuals. Using simulations of tax and social benefits and public pensions, the paper shows how the current tax, welfare, and pension systems create disincentives to work among these groups. The paper finds that incentives to retire early are strong for men, especially low-wage earners. The marginal effective tax rates also make it costly for low-income individuals to work and negatively affect the probability of participating. The paper proposes reform measures to enhance work incentives and labor participation, which will be crucial for dealing with population aging and for achieving higher potential growth in Slovenia.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 06/298.
Date of creation: 01 Dec 2006
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This paper has been announced in the following NEP Reports:
- NEP-AGE-2007-05-04 (Economics of Ageing)
- NEP-ALL-2007-05-04 (All new papers)
- NEP-EEC-2007-05-04 (European Economics)
- NEP-LAB-2007-05-04 (Labour Economics)
- NEP-PBE-2007-05-04 (Public Economics)
- NEP-TRA-2007-05-04 (Transition Economics)
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