TY - JOUR
T1 - The Redistributive Impact of Alternative Income Maintainance Schemes
T2 - A Microsimulation Study Using Swiss Data
AU - Abul Naga, Ramses H.
AU - Kolodziejczyk, Christophe
AU - Mueller, Tobias
PY - 2008/6
Y1 - 2008/6
N2 - Taking a benchmark scenario, the current situation in Switzerland, and using a microsimulation technique, we compare the effectiveness of various income maintenance schemes for reducing inequality and poverty. A full negative income tax allowance designed to eliminate poverty is shown to reduce income inequality most drastically. An integrated federal linear tax rate of 62 percent is required to make it viable. Aggregate work hours are reduced by approximately 10 percent and average disposable income falls by 9.3 percent under such circumstances. A participation income restricted to adults in employment and covering 50 percent of subsistence costs is however shown to result in an unambiguous social welfare improvement over the current situation in Switzerland.
AB - Taking a benchmark scenario, the current situation in Switzerland, and using a microsimulation technique, we compare the effectiveness of various income maintenance schemes for reducing inequality and poverty. A full negative income tax allowance designed to eliminate poverty is shown to reduce income inequality most drastically. An integrated federal linear tax rate of 62 percent is required to make it viable. Aggregate work hours are reduced by approximately 10 percent and average disposable income falls by 9.3 percent under such circumstances. A participation income restricted to adults in employment and covering 50 percent of subsistence costs is however shown to result in an unambiguous social welfare improvement over the current situation in Switzerland.
U2 - 10.1111/j.1475-4991.2008.00270.x
DO - 10.1111/j.1475-4991.2008.00270.x
M3 - Article
VL - 54
SP - 193
EP - 219
JO - Review of Income and Wealth
JF - Review of Income and Wealth
SN - 0034-6586
IS - 2
ER -
