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- Title
Tax incentives and family labor supply in Austria.
- Authors
Hanappi, Tibor; Müllbacher, Sandra
- Abstract
The family policy reform 2009 introduced tax deductibles for children and child care expenditures in Austria. In this paper we evaluate this reform based on a structural labor supply model with unitary households which has been estimated on the European Statistics on Income and Living Conditions cross-sections 2004-2008. We find that the reform had only small employment effects, most of them being generated through the introduction of a child care deductible. However, to illustrate the employment potential of a shift from universal child transfers to tax deductibles we propose additional simulations showing that such a policy shift would yield an increase in full time equivalents of approximately .70 % of overall employment, with married females increasing their labor supply by up to 1.5 %. While the proposed policy shifts have regressive effects in terms of their distributional impact, we show that phasing-out the tax deductible at higher income allows for the compensation of lower-income households without jeopardizing positive employment effects.
- Subjects
AUSTRIA; TAX incentives; LABOR supply; FAMILY policy; INCOME tax deductions for child care expenses; HOUSEHOLDS
- Publication
Review of Economics of the Household, 2016, Vol 14, Issue 4, p961
- ISSN
1569-5239
- Publication type
Article
- DOI
10.1007/s11150-013-9230-9