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Journal Article

Female labor supply, human capital, and welfare reform

Authors

Publication date

Sep 2016

Summary

We estimate a dynamic model of employment, human capital accumulation—including education, and savings for women in the United Kingdom, exploiting tax and benefit reforms, and use it to analyze the effects of welfare policy. We find substantial elasticities for labor supply and particularly for lone mothers. Returns to experience, which are important in determining the longer-term effects of policy, increase with education, but experience mainly accumulates when in full-time employment. Tax credits are welfare improving in the U.K., increase lone-mother labor supply and marginally reduce educational attainment, but the employment effects do not extend beyond the period of eligibility. Marginal increases in tax credits improve welfare more than equally costly increases in income support or tax cuts.

Published in

Econometrica

Volume and page numbers

84 , 1705 -1753

DOI

http://dx.doi.org/10.3982/ECTA11576

ISSN

16

Subjects

Human Capital, Labour Market, Public Policy, and Welfare Benefits

Links

University of Essex, Albert Sloman Library Periodicals *restricted to University of Essex registered users* - http://serlib0.essex.ac.uk/record=b1613481~S5

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