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A Welfare Evaluation of the 1986 Tax Reform for Married Couples in the United States

Listed author(s):
  • Matteo PICCHIO

    ()

    (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)

  • Giacomo VALLETTA

    ()

    (CORE - Universit‚ catholique de Louvain, Louvain-la-Neuve, Belgium)

This paper evaluates the welfare effects of the 1986 Tax Reform Act (TRA86). In thirty years since its introduction, several studies have analysed the effects of TRA86. However, preference heterogeneity and non-market dimensions of welfare have not been taken into account. We propose an evaluation of the impact of TRA86 on well-being using different welfare metrics which fully retain preference heterogeneity. We estimate utility functions with preference heterogeneity on the basis of structural models of family labor supply. Then, by way of these estimated preferences, we compute several welfare rankings corresponding to different ethical priors. Finally, we identify the losers and the winners of TRA86 under different ethical priors.
(This abstract was borrowed from another version of this item.)

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Paper provided by Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali in its series Working Papers with number 415.

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Length: 49
Date of creation: Jan 2016
Handle: RePEc:anc:wpaper:415
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  17. Ellwood, David T., 2000. "The Impact of the Earned Income Tax Credit and Social Policy Reforms on Work, Marriage, and Living Arrangements," National Tax Journal, National Tax Association, vol. 53(4), pages 1063-1106, December.
  18. Meyer, Bruce D. & Rosenbaum, Dan T., 2000. "Making Single Mothers Work: Recent Tax and Welfare Policy and Its Effects," National Tax Journal, National Tax Association, vol. 53(4), pages 1027-1062, December.
  19. Wooldridge, Jeffrey M., 1995. "Selection corrections for panel data models under conditional mean independence assumptions," Journal of Econometrics, Elsevier, vol. 68(1), pages 115-132, July.
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