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Taxes, Benefits and Labour Market Responses: New Evidence for

Author

Listed:
  • Callan, Tim

    (Economic and Social Research Institute (ESRI))

  • Layte, Richard

    (Economic and Social Research Institute (ESRI))

  • Van Soest, Arthur

    (Rand Corporation, Santa Monica)

  • Walsh, John R.

    (Economic and Social Research Institute (ESRI))

Abstract

Three main goals are achieved in this study. Estimates are provided of how strongly the labour supply of Irish married couples is linked to the financial rewards from work, based on best practice techniques from the international literature. Building on these estimates, the study shows how the labour supply implications of tax and welfare policy changes can be assessed in much greater depth than has been possible to date. Empirical estimates are provided, again based on best practice techniques, of the extent to which the durations of spells of unemployment are influenced by the balance between in-work and out-of-work incomes, as summarised by either the replacement rate (out-of-work income divided by in-work income) or the "cash gap" between in-work and out-of-work income. The conclusions draw out some wider implications and identify areas where further research, building on the base provided by the present study, seems likely to be fruitful.

Suggested Citation

  • Callan, Tim & Layte, Richard & Van Soest, Arthur & Walsh, John R., 2003. "Taxes, Benefits and Labour Market Responses: New Evidence for," Research Series, Economic and Social Research Institute (ESRI), number PRS48.
    • Handle: RePEc:esr:resser:prs48
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    References listed on IDEAS

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    1. repec:esr:chaptr:jacb200311 is not listed on IDEAS
    2. Brenda Gannon & Brian Nolan, 2004. "Inter-Industry Wage Differentials in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 35(2), pages 157-182.
    3. Callan, Tim & Walsh, John R. & Coleman, Kieran, 2005. "Budget 2006: Impact on Income Distribution and Relative Income Poverty," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2005(4-Winter), pages 1-6.
    4. Callan, Tim & van Soest, Arthur & Walsh, John R., 2003. "Tax Cuts, Tax Reform and Labour Supply Responses," Papers BP2004/3, Economic and Social Research Institute (ESRI).
    5. Callan, Tim & Keeney, Mary J. & Nolan, Brian & Maitre, Bertrand, 2004. "Why is Relative Income Poverty so High in Ireland?," Research Series, Economic and Social Research Institute (ESRI), number PRS53.
    6. Callan, Tim & Keeney, Mary J. & Walsh, John R., 2003. "Budget 2004: Impact on Income Distribution and Relative Income Poverty," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2003(4-Winter), pages 1-7.

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