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Welfare Analysis of Fiscal Reforms: Does the Representation of the Family Decision Process Matter? Evidence for Germany

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  • Laisney, François
  • Beninger, Denis
  • Beblo, Miriam

Abstract

This paper compares predictions obtained for the analysis of tax reforms with collective and unitary models of household labour supply and consumption behaviour. We simulate real world microdata by means of a collective approach, using a compound procedure of estimation and calibration based on the 1998 wave of the German socioeconomic panel. We estimate a unitary model on this ?collective? data set. Investigating a move from joint to individual taxation on the basis of both models, we obtain important discrepancies between predicted adjustments to labour supply and distortions in the welfare analysis of the reform on the basis of unitary estimates. These results suggest that increased efforts should be devoted to the estimation of collective models with taxation.

Suggested Citation

  • Laisney, François & Beninger, Denis & Beblo, Miriam, 2003. "Welfare Analysis of Fiscal Reforms: Does the Representation of the Family Decision Process Matter? Evidence for Germany," ZEW Discussion Papers 03-31, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:1675
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    4. Laisney, François & Beninger, Denis, 2002. "Comparison between unitary and collective models of household labor supply with taxation," ZEW Discussion Papers 02-65, ZEW - Leibniz Centre for European Economic Research.
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    11. Miriam Beblo & Elke Wolf, 2002. "How much does a year off cost? Estimating the wage effects of employment breaks and part-time periods," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 45(2), pages 191-217.
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    Cited by:

    1. Peter Haan & Michał Myck, 2012. "Multi-family households in a labour supply model: a calibration method with application to Poland," Applied Economics, Taylor & Francis Journals, vol. 44(22), pages 2907-2919, August.
    2. Bargain, Olivier & Moreau, Nicolas, 2006. "Effets d’une réforme fiscale sur l’offre de travail des ménages dans un cadre collectif simulé," L'Actualité Economique, Société Canadienne de Science Economique, vol. 82(1), pages 207-246, mars-juin.
    3. Olivier Bargain & Guy Lacroix & Luca Tiberti, 2018. "Validating the collective model of household consumption using direct evidence on sharing," Working Papers PMMA 2018-06, PEP-PMMA.
    4. Beninger, Denis & Laisney, François, 2006. "On the performance of unitary models of household labor supply estimated on “collective” data with taxation," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 81.
    5. Olivier Bargain & Guy Lacroix & Luca Tiberti, 2021. "Intrahousehold Resource Allocation and Individual Poverty: Assessing Collective Model Predictions against Direct Evidence on Sharing," Bordeaux Economics Working Papers 2021-11, Bordeaux School of Economics (BSE).
    6. Maria Concetta Chiuri & Ernesto Longobardi, 2002. "Welfare analysis of fiscal reforms in Europe: Does the representation of family decision processes matter? Evidence from Italy," SERIES 0007, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Jan 2002.
    7. Laisney, François & Beninger, Denis & Beblo, Miriam, 2003. "Family Tax Splitting: A Microsimulation of its Potential Labour Supply and Intra-household Welfare Effects in Germany," ZEW Discussion Papers 03-32, ZEW - Leibniz Centre for European Economic Research.
    8. Clauss, Markus & Schubert, Stefanie, 2009. "The ZEW combined microsimulation-CGE model: innovative tool for applied policy analysis," ZEW Discussion Papers 09-062, ZEW - Leibniz Centre for European Economic Research.
    9. Arntz, Melanie & Feil, Michael & Spermann, Alexander, 2003. "Die Arbeitsangebotseffekte der neuen Mini- und Midijobs : eine ex-ante Evaluation (The effects of the new mini- and midi-jobs on the suply of labour * an ex-ante evaluation)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(3), pages 271-290.
    10. Büttner, Thiess & Erbe, Katharina & Grimm, Veronika, 2015. "Why Pay More? Tax Planning of Married Couples," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113011, Verein für Socialpolitik / German Economic Association.
    11. Spermann, Alexander & Feil, Michael & Arntz, Melanie, 2003. "Maxi-Arbeitsangebotseffekte oder zusätzliche Arbeitslose durch Mini- und Midi-Jobs?," ZEW Discussion Papers 03-67, ZEW - Leibniz Centre for European Economic Research.
    12. Olivier Bargain & Miriam Beblo & Denis Beninger & Richard Blundell & Raquel Carrasco & Maria-Concetta Chiuri & François Laisney & Valérie Lechene & Nicolas Moreau & Michal Myck & Javier Ruiz-Castillo , 2006. "Does the Representation of Household Behavior Matter for Welfare Analysis of Tax-benefit Policies? An Introduction," Review of Economics of the Household, Springer, vol. 4(2), pages 99-111, June.
    13. Denis Beninger & Olivier Bargain & Miriam Beblo & Richard Blundell & Raquel Carrasco & Maria-Concetta Chiuri & François Laisney & Valérie Lechene & Ernesto Longobardi & Nicolas Moreau & Michal Myck & , 2006. "Evaluating the Move to a Linear Tax System in Germany and Other European Countries," Review of Economics of the Household, Springer, vol. 4(2), pages 159-180, June.
    14. Miriam Beblo & Denis Beninger, 2012. "Do husbands and wives pool their incomes? Experimental evidence," Working Papers of BETA 2012-10, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    15. Frederic Vermeulen & Olivier Bargain & Miriam Beblo & Denis Beninger & Richard Blundell & Raquel Carrasco & Maria-Concetta Chiuri & François Laisney & Valérie Lechene & Nicolas Moreau & Michal Myck & , 2006. "Collective Models of Labor Supply with Nonconvex Budget Sets and Nonparticipation: A Calibration Approach," Review of Economics of the Household, Springer, vol. 4(2), pages 113-127, June.
    16. Peter Haan, 2006. "Slowly, but Changing: How Does Genuine State Dependence Affect Female Labor Supply on the Extensive and Intensive Margin," JEPS Working Papers 06-002, JEPS.
    17. Peter Haan, 2005. "State Dependence and Female Labor Supply in Germany: The Extensive and the Intensive Margin," Discussion Papers of DIW Berlin 538, DIW Berlin, German Institute for Economic Research.
    18. Olivier Bargain & Laurine Martinoty, 2019. "Crisis at home: mancession-induced change in intrahousehold distribution," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(1), pages 277-308, January.
    19. Arntz, Melanie & Feil, Michael & Spermann, Alexander, 2003. "Die Arbeitsangebotseffekte der neuen Mini- und Midijobs : eine ex-ante Evaluation (The effects of the new mini- and midi-jobs on the suply of labour * an ex-ante evaluation)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(3), pages 271-290.
    20. Olivier Bargain, 2022. "Income Sources, Intra-Household Allocation And Individual Poverty," Commitment to Equity (CEQ) Working Paper Series 121, Tulane University, Department of Economics.
    21. Miriam Beblo & Denis Beninger, 2017. "Do husbands and wives pool their incomes? A couple experiment," Review of Economics of the Household, Springer, vol. 15(3), pages 779-805, September.
    22. Clauss, Markus & Schnabel, Reinhold, 2008. "Distributional and behavioural effects of the German labour market reform," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(4), pages 431-446.
    23. André Decoster & Peter Haan, 2014. "Welfare Effects of a Shift of Joint to Individual Taxation in the German Personal Income Tax," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 70(4), pages 599-624, December.

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    More about this item

    Keywords

    Collective model; household labour supply; intra household allocations;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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