The Distributive and Labor Supply Impact of the Minimum Insertion Income: The Case of Italy
This paper analyzes the redistributive and labor supply effects of extending at national level the Minimum Insertion Income, introduced experimentally in 1999 in some Italian municipalities. We develop a behavioral microsimulation tax-benefit model that allows for simultaneous labor supply decisions by household members, endogenous choice between dependent employment and self-employment, complete representation of the current Italian tax-benefit system. The results show a positive impact on both inequality and poverty, while overall labor supply reduces. On average magnitude of labor supply disincentive is small for married individuals, relatively larger for single persons and, within this category, for women than men. Copyright Springer Science+Business Media, Inc. 2006
Volume (Year): 12 (2006)
Issue (Month): 2 (May)
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