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Indicators of unemployment and low-wage traps (marginal effective tax rates on labour)

Author

Listed:
  • Giuseppe Carone
  • Aino Salomäki
  • Herwig Immervoll
  • Dominique Paturot

Abstract

This paper presents results of an on-going joint European Commission / OECD project, aimed at monitoring the direct influence of tax and benefit instruments on household incomes. Indicators of financial work incentives are needed for identifying any undesired influences of taxes and social transfers on people's work decisions. At the same time, a central part of recent tax and benefit reform strategies has been to reduce reliance on welfare by “making work pay†, that is, to make work an economically attractive option relative to welfare. It is therefore desirable to monitor the effects of such policies as well as the potential for further reform..

Suggested Citation

  • Giuseppe Carone & Aino Salomäki & Herwig Immervoll & Dominique Paturot, 2003. "Indicators of unemployment and low-wage traps (marginal effective tax rates on labour)," European Economy - Economic Papers 2008 - 2015 197, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:ecopap:0197
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    Cited by:

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    2. Dena Ringold & Leszek Kasek, 2007. "Social Assistance in the New EU Member States : Strengthening Performance and Labor Market Incentives," World Bank Publications - Books, The World Bank Group, number 6744.
    3. Alina ARSĂNI & George ȘTEFAN & Anca PARASCHIV-GHERMAN, 2017. "Exports in the European Union sub-models. Determinants and performances," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(610), S), pages 109-126, Spring.
    4. Michael Mitsopoulos, 2017. "Overtaxation of Private Sector Salaried Employment as a Key Impediment to the Recovery of Greece," Palgrave Macmillan Studies in Banking and Financial Institutions, in: Dimitrios D. Thomakos & Konstantinos I. Nikolopoulos (ed.), Taxation in Crisis, chapter 12, pages 289-336, Palgrave Macmillan.
    5. Michael MITSOPOULOS & Theodore PELAGIDIS, 2021. "Labor Taxation And Investment In Developed Countries. The Impact On Employment," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(2), pages 13-31, June.
    6. Võrk, Andres, 2009. "Labour supply incentives and income support systems in Estonia," Working Paper Series 2009:31, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    7. Bachmann, Ronald & Beimann, Boris & Bredtmann, Julia & David, Peggy & Ehlert, Christoph & Kassenböhmer, Sonja & Schaffner, Sandra & Siemers, Lars, 2011. "Studies on flexicurity Lot 1: Study on various aspects of labour market performance using micro data from the European Union statistics on income and living conditions (EU-SILC). Contract No. VC/2010/," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 72620.
    8. Alho, Kari O. E., 2006. "Labour Market Institutions and the Effectiveness of Tax and Benefit Policies in Enchancing Employment: A General Equilibrium Analysis," Discussion Papers 1008, The Research Institute of the Finnish Economy.
    9. Alexandru Avram & Marco Benvenuto & Costin Daniel Avram & Ginevra Gravili, 2019. "Assuring SME’s Sustainable Competitiveness in the Digital Era: A Labor Policy between Guaranteed Minimum Wage and ICT Skill Mismatch," Sustainability, MDPI, vol. 11(10), pages 1-20, May.
    10. Primoz Dolenc & Milan Vodopivec, 2005. "Does work pay in Slovenia?," Financial Theory and Practice, Institute of Public Finance, vol. 29(4), pages 341-362.
    11. Schuknecht, Ludger & Ebert, Werner & Thöne, Michael & Afonso, António, 2005. "Quality of public finances and growth," Working Paper Series 438, European Central Bank.

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    More about this item

    Keywords

    taxation; fiscal policy; household income; marginal effective tax rates; METR; unemployment trap; inactivity trap; low-wage trap; employment; Carone; Salomäki; Immervoll; Paturot;
    All these keywords.

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General

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