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Conference Paper 9th IZA/SOLE Transatlantic Meeting of Labor Economists, held 27-30 May, 2010, Buch/Ammersee, Germany

Design and long-term effects of in-work benefits ** draft - do not cite


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In-work benefits are an increasingly popular means of transferring income towards the less well-off without compromising work incentives. In this paper, we develop an evaluation framework that includes a full characterisation of the tax system and explicitly considers the role of: (i) contemporaneous incentives to work, (ii) anticipatory effects on the value of education and (iii) future consequences for employment through human capital accumulation. We model women's decisions within a risky environment, explicitly allowing for family dynamics. We estimate our model on British BHPS data and use this to simulate recent policy changes in the UK.


Welfare Benefits, Wages And Earnings, and Taxation



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