Back to the future - decomposition analysis of distributive policies using behavioural simulations

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dc.contributor.author Bargain, Olivier
dc.date.accessioned 2010-12-20T14:39:49Z
dc.date.available 2010-12-20T14:39:49Z
dc.date.issued 2010-10
dc.identifier.uri http://hdl.handle.net/10197/2666
dc.description.abstract For policy makers and analysts, it is important to isolate the redistributive impact of tax-benefit policy changes from changes in the environment in which policies operate. When actual reforms are motivated by work incentives, it is also crucial to evaluate behavioural responses and the distributional consequences thereof. For that purpose, we embed counterfactual simulations in a formal framework based on the Shapley value decomposition and quantify the relative roles of (i) tax-benefit policy changes (direct policy effect), (ii) labour supply responses to the policy reforms (in- direct effect) and (iii) all other factors affecting income distribution over time. An application to the UK shows that the redistributive reforms of the 1998-2001 period have offset the increase in inequality that would have occurred otherwise. They also contribute to a strong decline in child poverty and poverty amongst single parent households. In the latter group, a third of the headcount poverty reduction (and half of the reduction in the depth of poverty) is on account of the very large incentive effect of policy changes. en
dc.description.sponsorship Not applicable en
dc.format.extent 248929 bytes
dc.format.mimetype application/pdf
dc.language.iso en en
dc.publisher University College Dublin. School of Economics en
dc.relation.ispartofseries UCD Centre for Economic Research Working Paper Series en
dc.relation.ispartofseries WP 10 32 en
dc.relation.requires Economists Online Collection en
dc.subject Tax-benefi…t policy en
dc.subject Inequality en
dc.subject Poverty en
dc.subject Shapley value decomposition en
dc.subject Labour supply en
dc.subject Behavioural microsimulation en
dc.subject.classification H23 en
dc.subject.classification H53 en
dc.subject.classification I32 en
dc.subject.lcsh Fiscal policy en
dc.subject.lcsh Income distribution en
dc.subject.lcsh Decomposition (Mathematics) en
dc.subject.lcsh Labor supply en
dc.title Back to the future - decomposition analysis of distributive policies using behavioural simulations en
dc.type Working Paper en
dc.internal.availability Full text available en
dc.internal.webversions Publisher's version en
dc.internal.webversions http://www.ucd.ie/t4cms/wp10_32.pdf en
dc.status Not peer reviewed en
dc.neeo.contributor Bargain|Olivier|aut|UCD0001 en


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