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The Impact Of Tax And Social Benefit System Reforms On Work Incentives In Croatia: 2013-2018

Author

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  • Slavko Bezeredi

    (Institute of Public Finance, Zagreb, Croatia)

Abstract

Social benefit systems can have negative financial incentives to work, especially for those groups of people who lose generous amounts of social benefits when they move from unemployment to employment. The aim of this paper is to analyze the impact of the reforms of tax-benefit systems introduced in the period 2013-2018 on work incentives of unemployed persons in Croatia for selected types of hypothetical households and to conduct a comparative analysis of Croatia with other EU countries. As the main indicator of work incentives the participation tax rate is used, which is estimated using EUROMOD and OECD tax-benefit models. The results show that some types of households have very low work incentives in Croatia, namely, lone parents with two children and one-earner married couples with two children. Furthermore, the comparative analysis reveals that for the mentioned household types, Croatia is among the countries with the lowest incentives to work.

Suggested Citation

  • Slavko Bezeredi, 2019. "The Impact Of Tax And Social Benefit System Reforms On Work Incentives In Croatia: 2013-2018," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 28(2), pages 613-638, december.
    • Handle: RePEc:avo:emipdu:v:28:y:2019:i:2:p:613-638
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    More about this item

    Keywords

    work incentives; participation tax rate; EUROMOD; Croatia;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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