From Welfare to Work: Evaluating a Tax and Benefit Reform Targeted at Single Mothers in Sweden

29 Pages Posted: 31 Aug 2007

See all articles by Lennart Flood

Lennart Flood

Goeteborg University - School of Business, Economics and Law; IZA Institute of Labor Economics

Roger Wahlberg

University of Gothenburg - School of Economics & Commercial Law

Elina Pylkkänen

Göteborg University; Ministry of Finance

Abstract

In this paper we evaluate a hypothetical tax and benefit reform to increase the working hours and to decrease welfare participation of single mothers in Sweden. We formulate and estimate simultaneously a structural static model of labor supply and welfare participation. The results suggest that labor supply among single mother households in Sweden is quite elastic, and that there is self-selection into welfare. We also find that the proposed reform would generate welfare gains for virtually everyone in the sample, benefit low-income households, and would at the same time generate a small revenue surplus.

Suggested Citation

Flood, Lennart and Wahlberg, Roger and Pylkkanen, Elina, From Welfare to Work: Evaluating a Tax and Benefit Reform Targeted at Single Mothers in Sweden. Labour, Vol. 21, No. 3, pp. 443-471, September 2007, Available at SSRN: https://ssrn.com/abstract=1011289 or http://dx.doi.org/10.1111/j.1467-9914.2007.00386.x

Lennart Flood (Contact Author)

Goeteborg University - School of Business, Economics and Law ( email )

Box 640
SE 405 30 Goeteborg
Sweden
+46 31 773 1331 (Phone)
+46 31 773 1043 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Roger Wahlberg

University of Gothenburg - School of Economics & Commercial Law ( email )

Vasagatan 1, Box 640
Gothenburg, 40530
Sweden

Elina Pylkkanen

Göteborg University ( email )

Viktoriagatan 30
Göteborg, 405 30
Sweden

Ministry of Finance ( email )

Drottningatan 21
Stockholm 10333, 103 33
Sweden

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