IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Normative Evaluation of Tax Policies: From Households to Individuals

  • Bargain, Olivier

    ()

    (Aix-Marseille University)

We analyze the impact on French couples of a tax policy change – the introduction of a family tax credit – using jointly a collective model of household labor supply and a tax-benefit microsimulation program. In a first step, we suggest a larger interpretation of labor supply behaviors which represent a general concept of ‘effort’ rather than the simple working duration. In this case, individual productivities cannot be assimilated with wage rates and must be retrieved. We do so by inverting the optimal household program to express productivities in function of observed labor incomes, under simple assumptions on preferences and the bargaining rule. In a second step, the calibrated model is used to predict distributive and incentives effects of the reform. By use of the collective approach, individual or household welfare indices can be aggregated within a social welfare function. Under previous assumptions, it is shown that the desirability of the reform may depend on the unit under consideration (household or individual). This simple exercise aims to take family modeling toward empirical applications and questions the validity of normative tools (social welfare functions) when both intra- and inter-household redistribution effects are accounted for.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://ftp.iza.org/dp1441.pdf
Download Restriction: no

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1441.

as
in new window

Length: 31 pages
Date of creation: Dec 2004
Handle: RePEc:iza:izadps:dp1441
Contact details of provider: Postal:
IZA, P.O. Box 7240, D-53072 Bonn, Germany

Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information: Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:


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.:

as in new window
  1. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
  2. Isabelle Terraz & Olivier Bargain, 2003. "Évaluation et mise en perspective des effets incitatifs et redistributifs de la Prime pour l’emploi," Économie et Prévision, Programme National Persée, vol. 160(4), pages 121-147.
  3. Dauphin, Anyck & Fortin, Bernard, 2001. "A test of collective rationality for multi-person households," Economics Letters, Elsevier, vol. 71(2), pages 211-216, May.
  4. Pierre-André Chiappori & Bernard Fortin & Guy Lacroix, 2001. "Marriage Market, Divorce Legislation and Household Labor Supply," CIRANO Working Papers 2001s-16, CIRANO.
  5. Bourguignon, F., 1999. "The Cost of Children: May the Collective Approach to Household Behavior Help?," DELTA Working Papers 1999-01, DELTA (Ecole normale supérieure).
  6. Haddad, L. & Kanbur, R., 1989. "How Serious Is The Neglectof Intra-Household Inequality?," Papers 450, Stockholm - International Economic Studies.
  7. Browning, M. & Bourguignon, F. & Chiappori, P.A. & Lechene, V., 1992. "Incomes and Outcomes: A structural Model of Intra-Household Allocation," DELTA Working Papers 92-23, DELTA (Ecole normale supérieure).
  8. M. Browning & P. A. Chiappori, 1998. "Efficient Intra-Household Allocations: A General Characterization and Empirical Tests," Econometrica, Econometric Society, vol. 66(6), pages 1241-1278, November.
  9. Eugenio Peluso & Alain Trannoy, 2004. "Does Less Inequality among Households Mean Less Inequality among Individuals?," IDEP Working Papers 0407, Institut d'economie publique (IDEP), Marseille, France, revised Jun 2004.
  10. Frederic Vermeulen, 2005. "And the winner is... An empirical evaluation of unitary and collective labour supply models," Empirical Economics, Springer, vol. 30(3), pages 711-734, October.
  11. Heckman, James J, 1993. "What Has Been Learned about Labor Supply in the Past Twenty Years?," American Economic Review, American Economic Association, vol. 83(2), pages 116-21, May.
  12. Chiappori, P.A., 1989. "Collective Labour Supply and Welfare," DELTA Working Papers 89-07, DELTA (Ecole normale supérieure).
  13. Herwig Immervoll & Henrik Jacobsen Kleven & Claus Thustrup Kreiner & Emmanuel Saez, 2007. "Welfare reform in European countries: a microsimulation analysis," Economic Journal, Royal Economic Society, vol. 117(516), pages 1-44, 01.
  14. Bargain, Olivier & Moreau, Nicolas, 2003. "Is the Collective Model of Labor Supply Useful for Tax Policy Analysis? A Simulation Exercise," Cahiers de recherche 0308, CIRPEE.
  15. Kaushik Basu, 2004. "Gender and Say A Model of Household Behavior with Endogenously-determined Balance of Power," Harvard Institute of Economic Research Working Papers 2054, Harvard - Institute of Economic Research.
  16. François Bourguignon & Amedeo Spadaro, 2000. "Redistribution et incitations au travail. Une application empirique simple de la fiscalité optimale," Revue Économique, Programme National Persée, vol. 51(3), pages 473-487.
  17. J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Oxford University Press, vol. 38(2), pages 175-208.
  18. Bargain, Olivier & Orsini, Kristian, 4/12. "In-Work Policies in Europe: Killing Two Birds with One Stone?," IZA Discussion Papers 1445, Institute for the Study of Labor (IZA).
  19. Jeremy Lise & Shannon Seitz, 2007. "Consumption inequality and intra-household allocations," IFS Working Papers W07/09, Institute for Fiscal Studies.
  20. Kooreman, P. & Kapteyn, A.J., 1989. "On the empirical implementation of some game theoretic models of household labor supply," Discussion Paper 1989-56, Tilburg University, Center for Economic Research.
  21. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, December.
  22. François Bourguignon & Thierry Magnac, 1990. "Labor Supply and Taxation in France," Journal of Human Resources, University of Wisconsin Press, vol. 25(3), pages 358-389.
  23. Richard Blundell & Pierre-André Chiappori & Costas Meghir, 2005. "Collective Labor Supply with Children," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1277-1306, December.
  24. Bruce Bradbury, 2004. "Consumption and the Within-household Income Distribution: Outcomes from an Australian "Natural Experiment"," CESifo Economic Studies, CESifo, vol. 50(3), pages 501-540.
  25. Hausman, Jerry A, 1985. "The Econometrics of Nonlinear Budget Sets," Econometrica, Econometric Society, vol. 53(6), pages 1255-82, November.
  26. Martin Browning & Mette Gortz, 2006. "Spending time and money within the household," Economics Series Working Papers 288, University of Oxford, Department of Economics.
  27. Lundberg, S.J. & Pollak, R.A. & Wales, T.J., 1994. "Do Husbands and Wives Pool Their Resources? Evidence from U.K. Child Benefit," Discussion Papers in Economics at the University of Washington 94-6, Department of Economics at the University of Washington.
  28. Valerie Lechene & Martin Browning, 2001. "Caring and Sharing: Tests Between Alternative Models of Intra-Household Allocation," Economics Series Working Papers 70, University of Oxford, Department of Economics.
  29. Laisney, François & Beninger, Denis, 2002. "Comparison between unitary and collective models of household labor supply with taxation," ZEW Discussion Papers 02-65, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  30. Chiappori, Pierre-Andre, 1997. "Introducing Household Production in Collective Models of Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 191-209, February.
  31. François Bourguignon & Maria Concetta Chiuri, 2005. "Labor market time and home production: A new test for collective models of intra- household allocation," CSEF Working Papers 131, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  32. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
  33. Apps, P.F. & Rees, R., 1996. "Collective Labor Supply and Household Production," Papers 301, Australian National University - Department of Economics.
  34. Guy Laroque, 2005. "Income Maintenance and Labor Force Participation," Econometrica, Econometric Society, vol. 73(2), pages 341-376, 03.
  35. Olivier Donni, 2001. "Collective Household Labor Supply: Nonparticipation and Income Taxation," Cahiers de recherche CREFE / CREFE Working Papers 140, CREFE, Université du Québec à Montréal.
  36. Richard Blundell & Alan Duncan & Julian McCrae & Costas Meghir, 2000. "The labour market impact of the working families’ tax credit," Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 75-103, March.
  37. Browning, Martin, 1992. "Children and Household Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1434-75, September.
  38. Michael J. Boskin & Eytan Sheshinski, 1979. "Optimal Tax Treatment of the Family: Married Couples," NBER Working Papers 0368, National Bureau of Economic Research, Inc.
  39. Dr Justin van de Ven, 2004. "Estimating Equivalence Scales for Tax and Benefits Systems," NIESR Discussion Papers 229, National Institute of Economic and Social Research.
  40. Cécile Boyer & Christian Gourieroux & Gaëlle Le Fol, 2001. "Ajustement des prix bid et ask en présence d'information privée," Working Papers 2001-25, Centre de Recherche en Economie et Statistique.
  41. Olivier Donni, 2004. "A Collective Model of Household Behavior with Private and Public Goods: Theory and Some Evidence from U.S. Data," Cahiers de recherche 0402, CIRPEE.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp1441. 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: (Mark Fallak)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.