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Hypothetical Tax-Benefit Reforms in Hungary: Shifting from Tax Relief to Cash Transfers for Family Support

Authors

Garcia, Ana Agundez , CHRISTL, MICHAEL

External publication

Si

Means

East. Eur. Econ.

Scope

Article

Nature

Científica

JCR Quartile

SJR Quartile

JCR Impact

1.3

SJR Impact

0.345

Publication date

02/11/2023

ISI

001007675800001

Scopus Id

2-s2.0-85161951214

Abstract

This paper evaluates two hypothetical budget-neutral reforms that shift resources from family tax expenditures to family cash transfers. We evaluate these reforms using a structural labor supply model based on the microsimulation EUROMOD model and EU-SILC data. We find that both reforms have an inequality-decreasing impact. However, when looking at labor supply responses for different household types, we show that the reforms have a non-negligible impact, especially for females in couple households. Additionally, we show that females in the middle of the income distribution in particular reduce labor supply in response to the reforms.

Keywords

Discrete choice; EUROMOD; family benefits; labor supply; microsimulation; reform

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