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The Distributive and Labor Supply Impact of the Minimum Insertion Income: The Case of Italy

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  • Cristina Berliri
  • Valentino Parisi

Abstract

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

Suggested Citation

  • Cristina Berliri & Valentino Parisi, 2006. "The Distributive and Labor Supply Impact of the Minimum Insertion Income: The Case of Italy," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 12(2), pages 213-227, May.
    • Handle: RePEc:kap:iaecre:v:12:y:2006:i:2:p:213-227:10.1007/s11294-006-9005-7
    DOI: 10.1007/s11294-006-9005-7
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    References listed on IDEAS

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    1. Valentino Parisi & Cristina Berliri, 2003. "Poverty targeting e impatto redistributivo del reddito minimo di inserimento," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2003(81).
    2. Dickens, William T & Lundberg, Shelly J, 1993. "Hours Restrictions and Labor Supply," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(1), pages 169-192, February.
    3. Massimo Baldini & Stefano Toso & Paolo Bosi, 2002. "Targeting welfare in Italy: old problems and perspectives on reform," Fiscal Studies, Institute for Fiscal Studies, vol. 23(1), pages 51-75, March.
    4. Aaberge, Rolf & Colombino, Ugo & Strom, Steinar, 1999. "Labour Supply in Italy: An Empirical Analysis of Joint Household Decisions, with Taxes and Quantity Constraints," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(4), pages 403-422, July-Aug..
    5. Aaberge, R. & Colombino, U. & Strom, S. & Wennemo, T., 1998. "Evaluating alternative tax reforms in Italy with a model of joint labor supply of married couples," Structural Change and Economic Dynamics, Elsevier, vol. 9(4), pages 415-433, December.
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    Cited by:

    1. Paolo Brunori & Maria Concetta Chiuri & Vito Peragine, 2010. "The Economic effects of a Local Minimum Income Support Program," SERIES 0029, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Mar 2010.

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    More about this item

    Keywords

    H23; I38;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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