IDEAS home Printed from https://ideas.repec.org/a/hpe/journl/y2023v245i2p35-69.html
   My bibliography  Save this article

Propuesta de implantación de políticas de complemento salarial en el Ingreso Mínimo Vital y en el IRPF: un análisis empírico con EUROMOD

Author

Listed:
  • Miguel Gómez de Antonio

    (Universidad Complutense de Madrid)

  • Noemí Villazán Pellejero

    (Ayuntamiento de Madrid. Consejería Técnica del Area de Gobierno de Economía, Innovación y Hacienda)

Abstract

This paper analyzes the effect of two complementary making work pay policies using EUROMOD. The first policy is targeted to households in severe poverty and has been designed as a wage complement on the Ingreso Mínimo Vital (IMV). The second has a broader coverage and consist on a refundable tax credit for individuals with low wages. We analyze the effects of these policies on poverty, income distribution and labor market participation. The results show that these policies have positive effects on poverty reduction, as they significantly improve the income levels of households participating in the labor market, especially for households with children. At the extensive margin, disincentives to labor market participation are reduced, maintaining adequate levels of protection against unemployment. At the intensive margin, they slightly soften the disincentive on labor market participation of households in severe poverty.

Suggested Citation

  • Miguel Gómez de Antonio & Noemí Villazán Pellejero, 2023. "Propuesta de implantación de políticas de complemento salarial en el Ingreso Mínimo Vital y en el IRPF: un análisis empírico con EUROMOD," Hacienda Pública Española / Review of Public Economics, IEF, vol. 245(2), pages 35-69, June.
    • Handle: RePEc:hpe:journl:y:2023v:245:i:2:p:35-69
    as

    Download full text from publisher

    File URL: https://hpe-rpe.org/wp-admin/admin-ajax.php?juwpfisadmin=false&action=wpfd&task=file.download&wpfd_category_id=230&wpfd_file_id=5264&token=92e86349c579a4ba97a7b0539a6907a7&preview=1
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Molina Millán, Teresa & Macours, Karen & Maluccio, John A. & Tejerina, Luis, 2020. "Experimental long-term effects of early-childhood and school-age exposure to a conditional cash transfer program," Journal of Development Economics, Elsevier, vol. 143(C).
    2. Teresa Molina Millán & Tania Barham & Karen Macours & John A Maluccio & Marco Stampini, 2019. "Long-Term Impacts of Conditional Cash Transfers: Review of the Evidence," The World Bank Research Observer, World Bank, vol. 34(1), pages 119-159.
    3. Guillaume Allegre & Bruno Ducoudre, 2018. "Prime d'activité : quelle efficacité redistributive et incitative ?," Post-Print hal-03458069, HAL.
    4. Day Manoli & Nicholas Turner, 2018. "Cash-on-Hand and College Enrollment: Evidence from Population Tax Data and the Earned Income Tax Credit," American Economic Journal: Economic Policy, American Economic Association, vol. 10(2), pages 242-271, May.
    5. Hilary Hoynes & Doug Miller & David Simon, 2015. "Income, the Earned Income Tax Credit, and Infant Health," American Economic Journal: Economic Policy, American Economic Association, vol. 7(1), pages 172-211, February.
    6. HERNANDEZ MARTIN Adrian & PICOS Fidel, 2021. "Income support to families with children in Spain," JRC Working Papers on Taxation & Structural Reforms 2021-10, Joint Research Centre.
    7. repec:hal:spmain:info:hdl:2441/6lg7sninad813qoso66700dfas is not listed on IDEAS
    8. Stancanelli, Elena G.F., 2008. "Evaluating the impact of the French tax credit on the employment rate of women," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2036-2047, October.
    9. H. Xavier Jara & Alberto Tumino, 2013. "Tax-benefit systems, income distribution and work incentives in the European Union," International Journal of Microsimulation, International Microsimulation Association, vol. 1(6), pages 27-62.
    10. Elena Stancanelli, 2008. "Evaluating the impact of the French tax credit on the employment rate of women," PSE-Ecole d'économie de Paris (Postprint) hal-03417077, HAL.
    11. Ariel Fiszbein & Norbert Schady & Francisco H.G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications - Books, The World Bank Group, number 2597, December.
    12. Eamon, Mary Keegan & Wu, Chi-Fang & Zhang, Saijun, 2009. "Effectiveness and limitations of the Earned Income Tax Credit for reducing child poverty in the United States," Children and Youth Services Review, Elsevier, vol. 31(8), pages 919-926, August.
    13. Elena Stancanelli, 2008. "Evaluating the impact of the French tax credit on the employment rate of women," Post-Print hal-03417077, HAL.
    14. Eissa, Nada & Hoynes, Hilary, 2011. "Redistribution and Tax Expenditures: The Earned Income Tax Credit," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(2), pages 689-729, June.
    15. Cyrine Hannafi & Rémi Le Gall & François Legendre, 2022. "Recours et non-recours à la prime d’activité : une évaluation en termes de bien-être," Revue économique, Presses de Sciences-Po, vol. 73(5), pages 841-873.
    16. Bruce D. Meyer, 2010. "The Effects of the Earned Income Tax Credit and Recent Reforms," NBER Chapters, in: Tax Policy and the Economy, Volume 24, pages 153-180, National Bureau of Economic Research, Inc.
    17. Jacinta Dalgety & Richard Dorsett & Steven Johnston, 2010. "Employment Incentives for Sole Parents: Labour Market Effects of Changes to Financial Incentives and Support," Chapters, in: Iris Claus & Norman Gemmell & Michelle Harding & David White (ed.), Tax Reform in Open Economies, chapter 9, Edward Elgar Publishing.
    18. Ayala, Luis & Paniagua, Milagros, 2017. "The impact of in-work benefits on female labor supply and income distribution in Spain," EUROMOD Working Papers EM17/17, EUROMOD at the Institute for Social and Economic Research.
    19. Abhijit V. Banerjee & Rema Hanna & Gabriel E. Kreindler & Benjamin A. Olken, 2017. "Debunking the Stereotype of the Lazy Welfare Recipient: Evidence from Cash Transfer Programs," The World Bank Research Observer, World Bank, vol. 32(2), pages 155-184.
    20. Kourtney Koebel & Dionne Pohler, 2019. "Expanding the Canada Workers Benefit to Design a Guaranteed Basic Income," Canadian Public Policy, University of Toronto Press, vol. 45(3), pages 283-309, September.
    21. repec:hal:spmain:info:hdl:2441/26boggjgkt9ieo6q0qbn7g53ln is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Olivier Bargain & Mathias Dolls & Dirk Neumann & Andreas Peichl & Sebastian Siegloch, 2011. "Tax-Benefit Systems in Europe and the US: Between Equity and Efficiency," CESifo Working Paper Series 3534, CESifo.
    2. Verónica Amarante & Marco Manacorda & Edward Miguel & Andrea Vigorito, 2016. "Do Cash Transfers Improve Birth Outcomes? Evidence from Matched Vital Statistics, Program, and Social Security Data," American Economic Journal: Economic Policy, American Economic Association, vol. 8(2), pages 1-43, May.
    3. John Guyton & Kara Leibel & Day Manoli & Ankur Patel & Mark Payne & Brenda Schafer, 2023. "The Effects of EITC Correspondence Audits on Low-Income Earners," NBER Chapters, in: Tax Policy and the Economy, Volume 38, National Bureau of Economic Research, Inc.
    4. Lehmann, Etienne & Marical, François & Rioux, Laurence, 2013. "Labor income responds differently to income-tax and payroll-tax reforms," Journal of Public Economics, Elsevier, vol. 99(C), pages 66-84.
    5. repec:spo:wpecon:info:hdl:2441/9665 is not listed on IDEAS
    6. Diane Whitmore Schanzenbach & Michael R. Strain, 2021. "Employment Effects of the Earned Income Tax Credit: Taking the Long View," Tax Policy and the Economy, University of Chicago Press, vol. 35(1), pages 87-129.
    7. Hans Bloemen & Elena Stancanelli, 2007. "Modelling the employment and wage outcomes of spouses: is she outearning him?," Post-Print hal-01053593, HAL.
    8. repec:hal:spmain:info:hdl:2441/9665 is not listed on IDEAS
    9. repec:hal:wpspec:info:hdl:2441/9665 is not listed on IDEAS
    10. Olivier Bargain & Karina Doorley, 2009. "In-work transfers in good times and bad - simulations for Ireland," Working Papers 200930, School of Economics, University College Dublin.
    11. Jules Gazeaud & Claire Ricard, 2021. "Conditional cash transfers and the learning crisis: evidence from Tayssir scale-up in Morocco," NOVAFRICA Working Paper Series wp2102, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    12. Olivier Bargain & Karina Doorley, 2009. "Caught in the Trap? The Disincentive Effect of Social Assistance," Working Papers 200906, School of Economics, University College Dublin.
    13. Olivier Bargain & Andreas Peichl, 2016. "Own-wage labor supply elasticities: variation across time and estimation methods," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-31, December.
    14. John Dagsvik & Zhiyang Jia & Kristian Orsini & Guy Camp, 2011. "Subsidies on low-skilled workers’ social security contributions: the case of Belgium," Empirical Economics, Springer, vol. 40(3), pages 779-806, May.
    15. Claudio A. Agostini & Marcela Perticara & Javiera Selman, 2023. "Tackling Vulnerable Households through a Working Tax Credit Scheme: A Feasible Alternative to Cash Transfers," Hacienda Pública Española / Review of Public Economics, IEF, vol. 245(2), pages 119-155, June.
    16. Leon Bettendorf & Kees Folmer & Egbert Jongen, 2013. "The dog that did not bark: The EITC for single mothers in the Netherlands," CPB Discussion Paper 229, CPB Netherlands Bureau for Economic Policy Analysis.
    17. Tomoki Fujii & Christine Ho & Rohan Ray & Abu S. Shonchoy, 2021. "Conditional Cash Transfer, Loss Framing, and SMS Nudges: Evidence from a Randomized Field Experiment in Bangladesh," Working Papers 2109, Florida International University, Department of Economics.
    18. Olivier Bargain & Claire Keane, 2010. "Tax–Benefit‐revealed Redistributive Preferences Over Time: Ireland 1987–2005," LABOUR, CEIS, vol. 24(s1), pages 141-167, December.
    19. repec:hal:wpspec:info:hdl:2441/10023 is not listed on IDEAS
    20. O. Kondratjeva & S. P. Roll & M. Despard & M. Grinstein-Weiss, 2022. "The Impact of Tax Refund Delays on the Experience of Hardship Among Lower-Income Households," Journal of Consumer Policy, Springer, vol. 45(2), pages 239-280, June.
    21. repec:hal:spmain:info:hdl:2441/10023 is not listed on IDEAS
    22. Karine Briard, 2020. "L’élasticité de l’offre de travail des femmes en France. Petite revue de méthodes et de résultats," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(5), pages 39-72.
    23. Zimmermann, Laura, 2020. "Why Guarantee Employment? Evidence from a Large Indian Public-Works Program," GLO Discussion Paper Series 504, Global Labor Organization (GLO).
    24. Bettendorf, Leon J.H. & Folmer, Kees & Jongen, Egbert L.W., 2014. "The dog that did not bark: The EITC for single mothers in the Netherlands," Journal of Public Economics, Elsevier, vol. 119(C), pages 49-60.
    25. repec:spo:wpecon:info:hdl:2441/10023 is not listed on IDEAS
    26. Antoine de Mahieu, 2021. "In-work Benefits in Belgium: Effects on Labour Supply and Welfare," International Journal of Microsimulation, International Microsimulation Association, vol. 14(1), pages 43-72.

    More about this item

    Keywords

    Income support policies; Ingreso Mínimo Vital (IMV); Personal income tax; Poverty; Redistribution; Marginal effective rates; Micro-simulation; EUROMOD.;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hpe:journl:y:2023v:245:i:2:p:35-69. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Miguel Gómez de Antonio (email available below). General contact details of provider: https://edirc.repec.org/data/iefgves.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.