Title Work incentives across the income distribution and for model families in Lithuania: 2005–2013 /
Authors Navickė, Jekaterina ; Lazutka, Romas
DOI 10.1080/1406099X.2016.1205407
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Is Part of Baltic journal of economics.. Riga : Routledge Taylor & Francis Group. 2016, Vol. 16, no 2, p. 175-191.. ISSN 1406-099X. eISSN 2334-4385
Keywords [eng] Work incentives ; microsimulation ; model families ; Lithuania
Abstract [eng] The aim of this paper is to evaluate the impact of cash social benefits on work incentives across the income distribution and among selected model family types in Lithuania. The analysis of work incentives was carried out for 2005–2013 based on a combination of measures estimated using the EUROMOD tax–benefit microsimulation model. The analysis revealed high disincentives to work at the bottom of the income distribution, dominated by the effect of cash social benefits compared to taxes or social insurance contributions. A strong trade-off between benefit adequacy and work incentives is built into the design of the national cash benefit system, particularly social assistance. The challenge for policy design is thus to encourage active labour market participation among low earners without eroding the minimum income protection floor.
Published Riga : Routledge Taylor & Francis Group
Type Journal article
Language English
Publication date 2016