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Can in-work benefits improve social inclusion in the southern European countries?

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  • Figari, Francesco

Abstract

This paper analyses the effects of implementing a family-based and an individually-based in-work benefit in the Southern European Countries using EUROMOD, the EU-wide tax-benefit microsimulation model. In-Work Benefits (IWBs) are means-tested cash transfers given to individuals, through the tax system, conditional on their employment status. They are intended to enhance the incentives to accept work and redistribute resources to low income groups. The research confirms the presence of a trade off between the redistributive and the incentive effects of the different policies. Family-based in-work benefits are better targeted on the poorest households, in particular in Italy and Portugal. Individually-based policies lead to greater incentives to work, in particular in Italy and in Greece. Individually-based IWBs seem to be more efficient if the enhancement of the labour market participation of women in couples is of fundamental concern.

Suggested Citation

  • Figari, Francesco, 2009. "Can in-work benefits improve social inclusion in the southern European countries?," EUROMOD Working Papers EM4/09, EUROMOD at the Institute for Social and Economic Research.
  • Handle: RePEc:ese:emodwp:em4-09
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    File URL: https://www.iser.essex.ac.uk/research/publications/working-papers/euromod/em4-09.pdf
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    1. Immervoll, Herwig & Pearson, Mark, 2009. "A Good Time for Making Work Pay? Taking Stock of In-Work Benefits and Related Measures across the OECD," IZA Policy Papers 3, Institute for the Study of Labor (IZA).
    2. Peter Haan & Michal Myck, 2007. "Apply with Caution: Introducing UK-Style In-Work Support in Germany," Fiscal Studies, Institute for Fiscal Studies, vol. 28(1), pages 43-72, March.
    3. Eissa, Nada & Hoynes, Hilary, 2011. "Redistribution and Tax Expenditures: The Earned Income Tax Credit," National Tax Journal, National Tax Association, vol. 64(2), pages 689-729, June.
    4. Marco Francesconi & Wilbert van der Klaauw, 2007. "The Socioeconomic Consequences of "In-Work" Benefit Reform for British Lone Mothers," Journal of Human Resources, University of Wisconsin Press, vol. 42(1).
    5. R. V. Burkhauser & K. A. Couch & A. J. Glenn, "undated". "Public policies for the working poor: The earned income tax credit versus minimum wage legislation," Institute for Research on Poverty Discussion Papers 1074-95, University of Wisconsin Institute for Research on Poverty.
    6. Owens, Jeffrey, 2006. "Fundamental Tax Reform: An International Perspective," National Tax Journal, National Tax Association, vol. 59(1), pages 131-164, March.
    7. Brewer, Mike & Duncan, Alan & Shephard, Andrew & Suarez, Maria Jose, 2006. "Did working families' tax credit work? The impact of in-work support on labour supply in Great Britain," Labour Economics, Elsevier, vol. 13(6), pages 699-720, December.
    8. Figari, Francesco, 2011. "From housewives to independent earners: can the tax system help Italian women to work?," ISER Working Paper Series 2011-15, Institute for Social and Economic Research.
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    Cited by:

    1. Ive Marx & Brian Nolan, 2012. "GINI DP 51: In-Work Poverty," GINI Discussion Papers 51, AIAS, Amsterdam Institute for Advanced Labour Studies.
    2. Lane Kenworthy, 2015. "Do employment-conditional earnings subsidies work?," ImPRovE Working Papers 15/10, Herman Deleeck Centre for Social Policy, University of Antwerp.

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