Taxes and Benefits: Work Incentive Effects of Policies
Using net replacement rates between net household income while out of work and in work, the authors investigate to what extent taxes and benefits may affect work incentives. They find that in 2006, net replacement rates are higher for low-income households and for households with children and a partner, attenuating work incentives. Work incentives are significantly affected by eligibility rules and the amounts of benefits, particularly unemployment benefit and social assistance. Next, the authors examine how the reform of social benefits introduced in 2007 affects work incentives. While social assistance is less generous, diminishing the incidence of high net replacement rates, the reform gives preferential treatment to households with some work income. Net replacement rates are also higher for households with children, who receive a substantially higher housing benefit, but some less well-off households consequently receive less social assistance. The authors also see that increased parental allowance has the same crowding-out effect on other income-tested benefits as higher housing benefit has on social assistance. In addition, the rise in parental allowance may lock eligible individuals in non-employment, increasing the loss of human capital. This is particularly important for lone parents, who face the highest specific unemployment rate compared to other household types.
Volume (Year): 62 (2012)
Issue (Month): 1 (February)
|Contact details of provider:|| Postal: Opletalova 26, CZ-110 00 Prague|
Phone: +420 2 222112330
Fax: +420 2 22112304
Web page: http://ies.fsv.cuni.cz/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sorm, Vit & Terrell, Katherine, 2000.
"Sectoral Restructuring and Labor Mobility: A Comparative Look at the Czech Republic,"
Journal of Comparative Economics,
Elsevier, vol. 28(3), pages 431-455, September.
- Vit Sorm & Katherine Terrell, 1999. "Sectoral Restructuring and Labor Mobility: A Comparative Look at the Czech Republic," William Davidson Institute Working Papers Series 273, William Davidson Institute at the University of Michigan.
- Sorm, Vit & Terrell, Katherine, 2000. "Sectoral Restructuring and Labor Mobility: A Comparative Look at the Czech Republic," IZA Discussion Papers 111, Institute for the Study of Labor (IZA).
- Stephen Nickell & Luca Nunziata & Wolfgang Ochel, 2005. "Unemployment in the OECD Since the 1960s. What Do We Know?," Economic Journal, Royal Economic Society, vol. 115(500), pages 1-27, January.
- Giuseppe Carone & Herwig Immervoll & Dominique Paturot & Aino Salomäki, 2004. "Indicators of Unemployment and Low-Wage Traps: Marginal Effective Tax Rates on Employment Incomes," OECD Social, Employment and Migration Working Papers 18, OECD Publishing.
- Tito Boeri & Katherine Terrell, 2002.
"Institutional Determinants of Labor Reallocation in Transition,"
Journal of Economic Perspectives,
American Economic Association, vol. 16(1), pages 51-76, Winter.
- Tito Boeri & Katherine Terrell, 2001. "Institutional Determinants of Labor Reallocation in Transition," William Davidson Institute Working Papers Series 384, William Davidson Institute at the University of Michigan.
- Pedersen, Peder J. & Smith, Nina, 2001. "Unemployment Traps: Do Financial Disincentives Matter?," IZA Discussion Papers 274, Institute for the Study of Labor (IZA).
- Pedersen, Peder J. & Smith, Nina, 2002. "Unemployment Traps: Do Financial Dis-incentives matter?," CLS Working Papers 01-1, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
- Ondřej Schneider, 2004. ": Who Pays Taxes and Who Gets Benefits in the Czech Republic," Working Papers IES 68, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised 2004.
- Stepan Jurajda & Daniel M??nich, 2002. "Understanding Czech Long-Term Unemployment," William Davidson Institute Working Papers Series 498, William Davidson Institute at the University of Michigan.
- Zdenek Hrdlicka & Margaret Morgan & David Prušvic & William Tompson & Laura Vartia, 2010. "Further Advancing Pro-growth Tax and Benefit Reform in the Czech Republic," OECD Economics Department Working Papers 758, OECD Publishing.
- Tomáš Jelínek & Ondøej Schneider, 2001. "Czech Social Security and Tax System and Their Impact on the Income Distribution," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 51(12), pages 639-657, December.
- Herwig Immervoll & Pascal Marianna & Marco Mira d'Ercole, 2004. "Benefit Coverage Rates and Household Typologies: Scope and Limitations of Tax-Benefit Indicators," OECD Social, Employment and Migration Working Papers 20, OECD Publishing. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:fau:fauart:v:62:y:2012:i:1:p:27-43. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lenka Herrmannova)
If references are entirely missing, you can add them using this form.