<abstract xmlns="http://www.w3.org/1999/xhtml"><p>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.</p></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.

Labour Supply and Inequality Effects of In-Work Benefits: Evidence from Serbia

University of Antwerp and University of Bath

Naše gospodarstvo/Our economy

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

{"article-title":"Labour Supply and Inequality Effects of In-Work Benefits: Evidence from Serbia"}

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...

Labour Supply and Inequality Effects of In-Work Benefits: Evidence from Serbia

Published Online: Oct 04, 2019

Page range: 1 - 22

Received: Jul 01, 2019

Accepted: Sep 01, 2019

DOI: https://doi.org/10.2478/ngoe-2019-0010

Keywords
in-work benefits, labour supply, inequality, discrete choice model, microsimulation

© 2019 Saša Ranđelović et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Labour Supply and Inequality Effects of In-Work Benefits: Evidence from Serbia

Published Online: Oct 04, 2019

Page range: 1 - 22

Received: Jul 01, 2019

Accepted: Sep 01, 2019

DOI: https://doi.org/10.2478/ngoe-2019-0010

Keywordsin-work benefits, labour supply, inequality, discrete choice model, microsimulation

© 2019 Saša Ranđelović et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
in-work benefits, labour supply, inequality, discrete choice model, microsimulation