The effectiveness of Luxembourg's minimum guaranteed income

Amétépé, Fofo

doi:10.1111/j.1468-246x.2011.01421.x

Cited by 10 publications

(3 citation statements)

References 11 publications

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“…The Luxembourg minimum guaranteed income (Revenu Minimum Garanti or RMG) is the main social assistance programme in Luxembourg (see Amétépé, 2012;Fusco et al, 2014;Loutsch and Berger, 2019). It was introduced in 1986 and reformatted in 1999, with substantial changes to the eligibility criteria of age, residence and resources.…”

Section: Luxembourg Social Assistance Schemementioning

confidence: 99%

Investigating neighbourhood effects in welfare-to-work transitions

Dautel¹,

Fusco²

2021

SSRN Journal

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We analyse the existence and underlying mechanisms of neighbourhood effects in welfare-to-work transitions. The analysis is based on Luxembourg social security longitudinal data, which covers the period 2001-2015 and provides precise information at the postcode level, corresponding mostly to streets. Our identification strategy exploits plausible exogenous variations among neighbours provided by the thinness of the housing market once controlling for residential sorting. We first examine interactions among all neighbours using an individual-level analysis, before focusing on interactions among only welfare recipients using a matched-pair analysis. This second step allows us to deal with the mediating effect of welfare recipients' citizenship. The main findings highlight the existence of neighbourhood effects in welfare-to-work transitions, which are also affected by the characteristics of the neighbours, including their citizenship. These characteristics suggest that social norms and/or stigma prevail in welfare-to-work transitions over the support for welfare recipients to find a job, but not over the in-group support for welfare recipients. The matched-pair analysis provides contrasting results across citizenship for individuals from large-sized citizenship groups (interactions within the own group) and individuals from medium-sized groups (interactions between groups).

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Section: Luxembourg Social Assistance Schemementioning

confidence: 99%

Investigating neighbourhood effects in welfare-to-work transitions

Dautel¹,

Fusco²

2021

SSRN Journal

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“…However, not all individuals who choose not to work choose to take up their RMG entitlements. The take-up of Luxembourg's main form of Social Assistance, a means tested minimum income, the Revenu Minimum Garanti (RMG), has been estimated to be just one-third (Amétépé 2012). By ignoring the simultaneous decisions of labour market and welfare participation, the costing of tax-benefit reforms in a microsimulation framework may be misleading by overestimating the financial gain to the government of increases in labour supply.…”

Section: Empirical Approachmentioning

confidence: 99%

Making the Switch From Joint to Individual Taxation in Luxembourg. Cost, Behavioural Response and Welfare Effects

Islam

Doorley²,

Flood

2020

SSRN Journal

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We study the effect of a move from joint to individual taxation system using 2,276 couple household living in Luxembourg. We estimate simultaneously labour supply and social assistance (RMG) participation, exploiting a discrete choice model. We focus on the distributional, work (extensive and intensive margin) incentive, and the social welfare effect of introducing a mandatory individual taxation system in Luxembourg. The work incentive of married women increases by 2.27% in intensive margin and 2.58% in extensive margin after the reform. The incentive of married men is almost zero. Equivalised disposable income, after the behavioural adjustment, decreases on average 2.1 per cent. After adjustments to direct and indirect taxes, the net revenue-neutral result is a budget surplus for the central government of around €10 million.

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“…The big difference between actual value (in EUSILC) and simulated value (in LxTaxBen and EUROMOD) can be explained by non-take up ratio. In Luxembourg over 65 percent of all households potentially entitled do not claim RMG because of rational motivation; for example expected net utility from claiming, and stigma, play a major role in explaining the level of non-take up (Amétépé F. 2012).…”

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confidence: 99%

A Tax Benefit Model for Policy Evaluation in Luxembourg: LuxTaxBen

Islam¹,

Flood

2020

Statistics for Data Science and Policy Analysis

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We develop a behavioural micro simulation model (LuxTaxBen) that contains very precise information on income tax rules, as well as eligibility-rules for a number of welfare programs, such as social assistance, housing allowance etc. The model has been built specifically for analysing the Luxembourgish tax-transfer system whereby one can generate disposable income for various combinations of hours of work and welfare. It can be used for calculating accurate (net) household incomes conditional on labour supply while income tax rules and the various welfare benefit-levels are complicated functions of earned and unearned income. The LuxTaxBen is capable to handle almost all parts of the Luxembourg tax and transfer systems. Such a model has a great potential to be used for evaluating the effects of taxbenefit policy reforms and other changes on poverty, inequality, incentives and the governmental budget. It provides the users the opportunity to simulate the new rules in the Luxembourg tax-transfer system. The model consists of a number of modules such as module for child benefit, housing allowance, fees for child care. It is constructed in an integrated way so all the modules can be used together. This means that it is possible to analyses the interaction between the different transfer systems.

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The effectiveness of Luxembourg's minimum guaranteed income

Cited by 10 publications

References 11 publications

Investigating neighbourhood effects in welfare-to-work transitions

Investigating neighbourhood effects in welfare-to-work transitions

Making the Switch From Joint to Individual Taxation in Luxembourg. Cost, Behavioural Response and Welfare Effects

A Tax Benefit Model for Policy Evaluation in Luxembourg: LuxTaxBen

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