Arbeitspapier

SWEtaxben: a Swedish tax/benefit micro simulation model and an evaluation of a Swedish tax reform

The purpose of SWEtaxben is to evaluate the impact of changes in the tax/benefit systems on households as well as the central governmental budget. Relating to the micro simulation literature this model can be labeled a static micro simulation model with behavioral changes. This behavioral change takes two different forms and use two different types of models; first binary models that describe mobility in/out from non-work states such as old age pension, disability, unemployment, long term sickness and second models that describe change in working hours and welfare participation. Thus, apart from the choice to work or not to work, working hours conditional on working as well as welfare participation are treated as endogenous variables. As an application the model is used to evaluate the recent Swedish make work pay reform, effective from 2007 and further reinforced in 2008 and 2009. The key characteristic of this reform is an in-work tax credit and decreased state tax rate. Simulations performed by SWEtaxben show increased working hours at both the intensive as well as extensive margin. The tax decrease together with dynamic changes results in a strong increase in household's incomes but also a reduction in income inequality. However, even considering the increase in hours of work, the reform is far from being self-financed.

Language: Englisch

Bibliographic citation: Series: IZA Discussion Papers ; No. 4106

Classification: Wirtschaft
Personal Income, Wealth, and Their Distributions
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes

Subject: Micro simulation
tax-benefit system
in-work tax credit reform
Einkommensteuer
Sozialtransfer
Steuerreform
Steuerbegünstigung
Wirkungsanalyse
Schweden

Event: Geistige Schöpfung

(who): Ericson, Peter
Flood, Lennart
Wahlberg, Roger

Event: Veröffentlichung

(who): Institute for the Study of Labor (IZA)

(where): Bonn

(when): 2009

Handle: http://hdl.handle.net/10419/35720

URN: urn:nbn:de:101:1-2009051329

Last update: 10.03.2025, 11:44 AM CET

Data provider

This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Show original at data provider

Object type

Arbeitspapier

Associated

Ericson, Peter
Flood, Lennart
Wahlberg, Roger
Institute for the Study of Labor (IZA)

Time of origin

2009

Other Objects (12)