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

46 Pages Posted: 25 Oct 2003

See all articles by Lennart Flood

Lennart Flood

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

Elina Pylkkänen

Göteborg University; Ministry of Finance

Roger Wahlberg

University of Gothenburg - School of Economics & Commercial Law

Date Written: October 2003

Abstract

In this paper we propose a tax and benefit reform to increase the working hours and to decrease the welfare participation of single mothers in Sweden. We have access to highquality tax and income data, and use a detailed tax-benefit program to generate precise budget-sets. We formulate and estimate 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. The proposed reform would generate welfare-gains for virtually everyone in the sample, yet would be revenue neutral.

Keywords: single mothers, labor supply, welfare participation, tax and benefit reform

JEL Classification: J22, I38

Suggested Citation

Flood, Lennart and Pylkkanen, Elina and Wahlberg, Roger, From Welfare to Work: Evaluating a Proposed Tax and Benefit Reform Targeted at Single Mothers in Sweden (October 2003). Available at SSRN: https://ssrn.com/abstract=459562

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

Elina Pylkkanen

Göteborg University ( email )

Viktoriagatan 30
Göteborg, 405 30
Sweden

Ministry of Finance ( email )

Drottningatan 21
Stockholm 10333, 103 33
Sweden

Roger Wahlberg

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

Vasagatan 1, Box 640
Gothenburg, 40530
Sweden

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