The impact of turning a tax reduction into a tax credit to subsidize in-home services: an evaluation of the 2007 reform in France
Since 1991, French taxpayers who employ someone to work at their home (for care, cleaning, etc.) can deduct 50 % of the employment cost from their income tax. In 2007, the tax reduction was turned into a tax credit, making lower income households eligible. However, this change was limited to economically active home employers, which narrowed the scope of the reform. To measure its impact, we use exhaustive tax data, built into a panel covering the 2006-2008 period. First, we study the changes in the amounts refunded, in the number and in the characteristics of home employers. In 2008, households spent 7.8 billion euros on in-home services. 2.6 billion were refunded to them in tax reduction, only 151 million in actual tax credit. Among home employers that did not benefit from the tax reduction scheme in 2006, only 14% later became recipients of the tax credit. This is because the requirement to be economically active excludes the elderly, who make up most of the less well-off home employers. Next, we try to measure the causal change in the consumption of in-home services attributable to the new tax credit. Depending on the definition of the incentive, between 15 % and 25 % of households are impacted. Combining matching and difference-in-difference estimates, we find a significant increase both in the number of home employers and in their expenditure.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 01 41 17 50 50
Web page: http://www.insee.fr
More information through EDIRC
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.:
- Marco Caliendo & Sabine Kopeinig, 2005.
"Some Practical Guidance for the Implementation of Propensity Score Matching,"
Discussion Papers of DIW Berlin
485, DIW Berlin, German Institute for Economic Research.
- Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, 02.
- Caliendo, Marco & Kopeinig, Sabine, 2005. "Some Practical Guidance for the Implementation of Propensity Score Matching," IZA Discussion Papers 1588, Institute for the Study of Labor (IZA).
- Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
- Richard Blundell & Monica Costa Dias, 2002.
"Alternative approaches to evaluation in empirical microeconomics,"
CeMMAP working papers
CWP10/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Richard Blundell & Monica Costa Dias, 2009. "Alternative Approaches to Evaluation in Empirical Microeconomics," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
- Blundell, Richard & Costa Dias, Monica, 2008. "Alternative Approaches to Evaluation in Empirical Microeconomics," IZA Discussion Papers 3800, Institute for the Study of Labor (IZA).
- Richard Blundell & Monica Costa Dias, 2008. "Alternative approaches to evaluation in empirical microeconomics," CeMMAP working papers CWP26/08, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Richard Blundell & Mónica Costa Dias, 2008. "Alternative Approaches to Evaluation in Empirical Microeconomics," CEF.UP Working Papers 0805, Universidade do Porto, Faculdade de Economia do Porto.
- Edwin Leuven & Barbara Sianesi, 2003. "PSMATCH2: Stata module to perform full Mahalanobis and propensity score matching, common support graphing, and covariate imbalance testing," Statistical Software Components S432001, Boston College Department of Economics, revised 19 Jan 2015.
When requesting a correction, please mention this item's handle: RePEc:crs:wpdeee:g2011-12. 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: (D3E)
If references are entirely missing, you can add them using this form.