Incomes, incentives and the growth of means-testing in Hungary
The purpose of this paper is to examine the reform of family benefits and the growth of means-testing in Hungary. From 1996, many family benefits were means-tested for the first time. A new microsimulation model for Hungary, running on recent survey microdata, is used to simulate the impact of the 1996 reforms on government expenditures, the distribution of incomes, the targeting of benefits and effective marginal tax rates. These reforms are found to be largely benign and even progressive, but they also appear to be paving the way for the further extension of means-testing. The model is used to investigate such an extension by simulating the impact of a UK-style system of means-tested family benefits in Hungary. This system achieves some expenditure savings and better targeting of benefits, but also greatly increases effective marginal tax rates on low-income households with children. The paper argues that resulting poverty traps may increase child poverty in Hungary in the longer term and cautions against the overextension of means-testing.
Volume (Year): 20 (1999)
Issue (Month): 1 (March)
|Contact details of provider:|| Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE|
Phone: (+44) 020 7291 4800
Fax: (+44) 020 7323 4780
Web page: http://www.ifs.org.uk
More information through EDIRC
|Order Information:|| Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE|
References listed on IDEAS
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.:
- Coulter, Fiona & Heady, Christopher & Lawson, Colin & Smith, Stephen, 1997. "Social security reform for economic transition: the case of the Czech Republic," Journal of Public Economics, Elsevier, vol. 66(2), pages 313-326, November.
When requesting a correction, please mention this item's handle: RePEc:ifs:fistud:v:20:y:1999:i:1:p:77-99. 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: (Emma Hyman)
If references are entirely missing, you can add them using this form.