Labour Supply and Inequality Effects of In-Work Benefits: Evidence from Serbia
Author:
Ranđelović Saša1, Žarković Rakić Jelena1, Vladisavljević Marko2, Vujić Sunčica3
Affiliation:
1. University of Belgrade , Faculty of Economics , Serbia 2. Institute of Economic Sciences , Belgrade , Serbia 3. University of Antwerp and University of Bath , Department of Economics , Belgium
Abstract
Abstract
Low labour market participation, together with the high effective tax wedge at low wage levels, create a fertile ground for the introduction of the in-work benefits (IWB) in Serbia. Our paper provides an ex-ante evaluation of the two IWB schemes, directed at stimulating the labour supply and more equal income distribution. The methodological approach combines the tax-and-benefit microsimulation model with the discrete labour supply model. Our results show that both individual and family-based IWB schemes would considerably boost labour market participation, although family-based benefits would have disincentivizing effects for the secondary earners in couples. Most of the behavioural changes take place among the poorest individuals, with significant redistributive effects.
Publisher
Walter de Gruyter GmbH
Subject
Industrial and Manufacturing Engineering,General Agricultural and Biological Sciences,General Business, Management and Accounting,Materials Science (miscellaneous),Business and International Management
Reference60 articles.
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