Labor supply responses of Italian women to minimum income policies
Minimum income policies are means-tested policies aimed at guarantee all citizens with a minimum level of income and at fighting social exclusion typically associated with extreme poverty. Their main shortcoming relies on the theoretical disincentive e¤ect on labour market participation they could generate in the bottom part of income distribution, due to the high e¤ective marginal tax rate they impose around the threshold level. This paper employs a structural labor supply model under discrete choices to examine labor supply responses of Italian women to the introduction of a minimum income policy. Different thresholds levels and earnings exemption ratios (exemption of part of labour earnings from relevant family income) have been tested to assess the existence and the magnitude of the disincentive effect. The results show that the level of the eligibility threshold is crucial in determing the existence of a poverty trap mechanism while the earnings exemption mecanism seems not to play any role. Moreover, family structure is crucial: only married women experience a disincetive effect, that tends to vanishes the hgher the income thresholds, while single women participation rates increase under all possibilities.
|Date of creation:||Jul 2007|
|Date of revision:|
|Contact details of provider:|| Postal: Via Po 53 10124 Turin|
Web page: http://www.carloalberto.org/child-collegiocarloalberto/
More information through EDIRC
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.:
- Bargain, Olivier & Orsini, Kristian, 2006.
"In-work policies in Europe: Killing two birds with one stone?,"
Elsevier, vol. 13(6), pages 667-697, December.
- Bargain, Olivier & Orsini, Kristian, 2004. "In-Work Policies in Europe: Killing Two Birds with One Stone?," IZA Discussion Papers 1445, Institute for the Study of Labor (IZA).
- Olivier Bargain & Kristian Orsini, 2004. "In-work policies in Europe: killing two birds with one stone?," DELTA Working Papers 2004-13, DELTA (Ecole normale supérieure).
- Bargain, Olivier & Orsini, Kristian, 2004. "In-work policies in Europe: killing two birds with one stone?," EUROMOD Working Papers EM4/04, EUROMOD at the Institute for Social and Economic Research.
- Marc Gurgand & David Margolis, 2005.
"Does work pay in France ? Monetary incentives and the guaranteed minimum income,"
Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers)
- Marc Gurgand & David Margolis, 2005. "Does work pay in France? Monetary incentives and the guaranteed minimum income," Cahiers de la Maison des Sciences Economiques bla05002, Université Panthéon-Sorbonne (Paris 1).
- Gurgand, Marc & Margolis, David N., 2005. "Does Work Pay in France? Monetary Incentives and the Guaranteed Minimum Income," IZA Discussion Papers 1467, Institute for the Study of Labor (IZA).
- Heckman, James J, 1979.
"Sample Selection Bias as a Specification Error,"
Econometric Society, vol. 47(1), pages 153-61, January.
- Guyonne Kalb & Rosanna Scutella & Hsein Kew, 2002.
"Estimation of Wage Equations in Australia: Allowing for Censored Observations of Labour Supply,"
Melbourne Institute Working Paper Series
wp2002n26, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
- Guyonne Kalb & Rosanna Scutella, 2002. "Estimation of Wage Equations in Australia: Allowing for Censored Observations of Labour Supply," Melbourne Institute Working Paper Series wp2002n08, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
- Fortin, B. & Truchon, M., 1990.
"On Reforming the Welfare System: Workfare Meets the Negative Income Tax,"
Cahiers de recherche
9016, Université Laval - Département d'économique.
- Fortin, Bernard & Truchon, Michel & Beausejour, Louis, 1993. "On reforming the welfare system : Workfare meets the negative income tax," Journal of Public Economics, Elsevier, vol. 51(2), pages 119-151, June.
- Alan Duncan & Mark N. Harris, 2001.
"Simulating the Behavioural Effects of Welfare Reforms among Sole Parents in Australia,"
Melbourne Institute Working Paper Series
wp2001n06, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
- Duncan, Alan & Harris, Mark N, 2002. "Simulating the Behavioural Effects of Welfare Reforms among Sole Parents in Australia," The Economic Record, The Economic Society of Australia, vol. 78(242), pages 264-76, September.
- William T. Dickens & Shelly J. Lundberg, 1985.
"Hours Restrictions and Labor Supply,"
NBER Working Papers
1638, National Bureau of Economic Research, Inc.
- Guy Laroque & Bernard Salanie, 2002. "Labour market institutions and employment in France," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 17(1), pages 25-48.
- 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.
- 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.
- Aaberge, Rolf & Colombino, Ugo & Strom, Steinar, 1999. "Labour Supply in Italy: An Empirical Analysis of Joint Household Decisions, with Taxes and Quantity Constraints," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(4), pages 403-22, July-Aug..
- Carlos Farinha Rodrigues, 2004. "The Redistributive Impact of the Guaranteed Minimum Income Programme in Portugal," Working Papers Department of Economics 2004/09, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
- Daniela Del Boca & Marilena Locatelli & Silvia Pasqua, 2000.
"Employment Decisions of Married Women: Evidence and Explanations,"
CEIS, vol. 14(1), pages 35-52, 03.
- Daniela del Boca & Marilena Locatelli & Silvia Pasqua, 2000. "Employment Decisions of Married Women: Evidence and Explanations," CHILD Working Papers wp08_00, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
- Aaberge, Rolf & Colombino, Ugo & Strøm, Steinar, 2003.
"Do More Equal Slices Shrink the Cake? An Empirical Investigation of Tax-Transfer Reform Proposals in Italy,"
37/2003, Oslo University, Department of Economics.
- Rolf Aaberge & Ugo Colombino & Steinar Strøm, 2004. "Do more equal slices shrink the cake? An empirical investigation of tax-transfer reform proposals in Italy," Journal of Population Economics, Springer, vol. 17(4), pages 767-785, December.
- Richard Blundell & Thomas MaCurdy, 1998.
"Labour supply: a review of alternative approaches,"
IFS Working Papers
W98/18, Institute for Fiscal Studies.
- Miguel Gouveia & Carlos Farinha Rodrigues, 1999. "The impact of a "Minimum Guaranteed Income Program" in Portugal," Working Papers Department of Economics 1999/03, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
- Arthur van Soest, 1995. "Structural Models of Family Labor Supply: A Discrete Choice Approach," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 63-88.
When requesting a correction, please mention this item's handle: RePEc:wpc:wplist:wp14_07. 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: (Giovanni Bert)
If references are entirely missing, you can add them using this form.