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“…We show both the average withdrawal rate (AWR) and the replacement ratio as the AWR does not take income effects into account. This has different implications in different circumstances: Gregg et al (1999a) argue that replacement ratios give misleading impressions of work incentives for ... (cont) There is certainly a strong financial incentive to do some work: in these 12 States, a lone parent moving into part-time work will keep at least 70% of her gross earnings. In…”
Section: Replacement Ratios and Average Withdrawal Ratesmentioning
“…We show both the average withdrawal rate (AWR) and the replacement ratio as the AWR does not take income effects into account. This has different implications in different circumstances: Gregg et al (1999a) argue that replacement ratios give misleading impressions of work incentives for ... (cont) There is certainly a strong financial incentive to do some work: in these 12 States, a lone parent moving into part-time work will keep at least 70% of her gross earnings. In…”
Section: Replacement Ratios and Average Withdrawal Ratesmentioning
“…This approach would therefore fail to show any difference between Family Credit and WFTC resulting from the redistribution of resources away from main carers (mostly mothers) and toward main earners (mostly fathers). In fact, this part of the reform was not considered in the simu lation of the WFTC conducted both by Blundell, Duncan, McCrae, and Meghir (2000), and Gregg, Johnson and Reed (1999).…”
A framework for simplified implementation of the collective model of labor supply decisions is presented in the context of fiscal reforms in the UK. Through its collective form the model accounts for the well known problem of distribution between wallet and purse, a broadly debated issue which has so far been impossible to model due to the limitations of the unitary model of household behavior. A calibrated data set is used to model the effects of introducing two forms of the Working Families' Tax Credit. We also summarize results of estimations and calibrations obtained using the same methodology on data from five other European countries. The results underline the importance of taking account of the intrahousehold decision process and suggest that who receives government transfers does matter from the point of view of labor supply and welfare of household members. They also highlight the need for more research into models of household behavior.
“…Using structural modeling, Blundell et al (2000), Gregg et al (1999), and Paull et al (2000) predict that the 1999 reform should lead to a 1½-2½ percentage point increase in the employment rate of single mothers, while Blundell et al (2000) and Gregg et al (1999) predict that the labor force participation rates for married women should fall. This study presents a straightforward natural experiment, focusing on only the 1999 tax credit reform.…”
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