Research Catalog

Title

Welfare Reform in European Countries [electronic resource]: A Microsimulation Analysis / Herwig Immervoll ... [et al]

Publication

Paris : OECD Publishing, 2005.

Details

Additional Authors

• Immervoll, Herwig.
• Kleven, Henrik.
• Kreiner, Claus.
• Saez, Emmanuel.

Description

59 p.; 21 x 29.7cm.

Summary

This paper estimates the welfare and distributional impact of two types of welfare reform in the 15 (pre-enlargement) member countries of the European Union. The reforms are revenue neutral and financed by an overall and uniform increase in marginal tax rates on earnings. The first reform distributes the additional tax revenue uniformly to everybody (traditional welfare) while the second reform distributes tax proceeds uniformly to workers only (in-work benefit). We build a simple model of labour supply encompassing responses to taxes and transfers along both the intensive and extensive margin. We then use EUROMOD to describe current welfare and tax systems in European Union countries and use calibrated labour supply elasticities along the intensive and extensive margins to analyze the effects of the two welfare reforms. We quantify the equity-efficiency trade-off for a range of elasticity parameters. In most countries, because of large existing welfare programmes with high phase-out rates, the uniform redistribution policy is undesirable unless the redistributive tastes of the government are extreme. The inwork benefit reform, on the other hand, is desirable in a very wide set of cases. We discuss the practical policy implications for European welfare policy.

Series Statement

OECD Social, Employment and Migration Working Papers, 1815-199X ; no.28

Uniform Title

OECD Social, Employment and Migration Working Papers, no.28.

Subject

Social Issues/Migration/Health

LCCN

10.1787/873766824646

OCLC

oecd-lib-002339

Title

Welfare Reform in European Countries [electronic resource]: A Microsimulation Analysis / Herwig Immervoll ... [et al]

Imprint

Paris : OECD Publishing, 2005.

Series

OECD Social, Employment and Migration Working Papers, 1815-199X ; no.28

OECD Social, Employment and Migration Working Papers, 1815-199X ; no.28.

Connect to:

http://dx.doi.org/10.1787/873766824646

Indexed Term

Social Issues/Migration/Health

Added Author

Immervoll, Herwig.

Kleven, Henrik.

Kreiner, Claus.

Saez, Emmanuel.

Other Standard Identifier

10.1787/873766824646 doi