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Tax and Benefit Reforms in a Model of Labour Market Transitions

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  • Michal Myck
  • Howard Reed

Abstract

This paper discusses developments in the Netherlands concerning unemployment insurance, unemployment assistance and disability insurance. The emphasis is on how financial incentives for individual workers and firms affect flows of benefit recipients. The main message is that it is indeed helpful to screen workers who want to enter the benefit system, to establish counseling and monitoring of workers that are in the benefit system and to impose sanctions on workers or employers that abuse the system. The Dutch experience in reconstructing social security provides clear lessons for other countries. In diesem Beitrag stellen wir eine Methode vor, mit der die Wirkungen von finanziellen Anreizen des Steuer- und Transfersystems auf die Arbeitsmarktpartizipation anhand von Veränderungen im Beschäftigungsstatus geschätzt werden. Der Ansatz ist flexibel, wenige theoretische Annahmen erlauben es, die analysierte Population gegenüber Strukturmodellen auszuweiten. Dadurch können behinderte und nichtbehinderte Personen gemeinsam analysiert werden. Die finanziellen Anreize werden detailliert abgebildet. Mit dem Modell können Beschäftigungswirkungen von geringfügigen Änderungen der Grenzbelastungen als auch größere Reformen der britischen Arbeitsmarktpolitik – wie etwa die Einführung des Working Families’ Tax Credit durch die Labour-Regierung – analysiert werden. Die Methode basiert auf Matching-Verfahren, mit denen Querschnitts-Erhebungen und Panel-Daten zusammengeführt werden. Sie kann auch in anderen Ländern eingesetzt werden, in denen keine detaillierten Einkommensdaten im Rahmen von Panel-Studien erhoben werden.

Suggested Citation

  • Michal Myck & Howard Reed, 2006. "Tax and Benefit Reforms in a Model of Labour Market Transitions," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 75(3), pages 208-239.
  • Handle: RePEc:diw:diwvjh:75-3-12
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    File URL: http://ejournals.duncker-humblot.de/doi/pdf/10.3790/vjh.75.3.208
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    1. repec:ebl:ecbull:v:10:y:2003:i:3:p:1-7 is not listed on IDEAS
    2. 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, vol. 21(1), pages 75-103, March.
    3. Jonathan Gruber, 2000. "Disability Insurance Benefits and Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1162-1183, December.
    4. Bound, John, 1989. "The Health and Earnings of Rejected Disability Insurance Applicants," American Economic Review, American Economic Association, vol. 79(3), pages 482-503, June.
    5. John Bound, 1991. "Self-Reported Versus Objective Measures of Health in Retirement Models," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 106-138.
    6. Michal Myck & Howard Reed, 2006. "Tax and Benefit Reforms in a Model of Labour Market Transitions," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 75(3), pages 208-239.
    7. Jon Harkness, 1993. "Labour Force Participation by Disabled Males in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 26(4), pages 878-889, November.
    8. Parsons, Donald O, 1982. "The Male Labour Force Participation Decision: Health, Reported Health, and Economic Incentives," Economica, London School of Economics and Political Science, vol. 49(193), pages 81-91, February.
    9. Michal Myck & Olivier Bargain & Miriam Beblo & Denis Beninger & Richard Blundell & Raquel Carrasco & Maria-Concetta Chiuri & François Laisney & Valérie Lechene & Ernesto Longobardi & Nicolas Moreau & , 2006. "The Working Families’ Tax Credit and Some European Tax Reforms in A Collective Setting," Review of Economics of the Household, Springer, vol. 4(2), pages 129-158, June.
    10. Brewer, Mike & Duncan, Alan & Shephard, Andrew & Suarez, Maria Jose, 2006. "Did working families' tax credit work? The impact of in-work support on labour supply in Great Britain," Labour Economics, Elsevier, vol. 13(6), pages 699-720, December.
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    1. repec:diw:diwwpp:dp1315 is not listed on IDEAS
    2. Michal Myck & Anna Kurowska & Michal Kundera, 2013. "Financial support for families with children and its trade-offs: balancing redistribution and parental work incentives," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 13(2), pages 59-83, December.
    3. Michal Myck & Howard Reed, 2006. "Tax and Benefit Reforms in a Model of Labour Market Transitions," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 75(3), pages 208-239.
    4. Anna Kurowska & Michal Myck & Katharina Wrohlich, 2012. "Family and Labor Market Choices: Requirements to Guide Effective Evidence-Based Policy," Discussion Papers of DIW Berlin 1234, DIW Berlin, German Institute for Economic Research.
    5. Morawski, Leszek & Myck, Michal, 2010. "'Klin'-ing up: Effects of Polish tax reforms on those in and on those out," Labour Economics, Elsevier, vol. 17(3), pages 556-566, June.

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