Discrete choice modelling of labour supply in Luxembourg through EUROMOD microsimulation

Arbeitspapier

In this study, the household labour supply is modelled as a discrete choice problem assuming that preference for leisure and consumption can be described by a quadratic utility function which allows for non-convexities in the budget set. We assess behavioural responses to the significant changes in the taxbenefit system during 2001-2002 in Luxembourg. Only moderate impact is found, on average, on the efficiency of the economy as measured by the labour supply effects. The impact is indeed concentrated on richer single women. These increase significantly their labour force, which more than doubles the nonbehavioural effect of the tax reform on disposable income and boosts the gains in well-being for that part of population.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: EUROMOD Working Paper ; No. EM5/10

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities ; Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes ; Fiscal Policies and Behavior of Economic Agents: Household ; Time Allocation and Labor Supply
• Subject: Labour supply ; Discrete choice ; Households ; EUROMOD ; Microsimulation ; Tax reform ; Arbeitsangebot ; Offenbarte Präferenzen ; Freizeit ; Konsum ; Steuerreform ; Verhaltensökonomik ; Simulation ; Luxemburg

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Berger, Frédéric ; Islam, Nizamul ; Liégeois, Philippe
• Event: Veröffentlichung
• (who): University of Essex, Institute for Social and Economic Research (ISER)
• (where): Colchester
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/64882
• Last update: 10.03.2025, 11:44 AM CET