RT Journal Article
SR Electronic
T1 Household Labor Supply and Welfare Participation in Sweden
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 1008
OP 1032
DO 10.3368/jhr.XXXIX.4.1008
VO XXXIX
IS 4
A1 Flood, Lennart
A1 Hansen, Jörgen
A1 Wahlberg, Roger
YR 2004
UL http://jhr.uwpress.org/content/XXXIX/4/1008.abstract
AB We formulate and estimate a structural, static model of household labor supply and multiple welfare program participation. Given the complicated nature of both the income tax schedule and the benefit rules for different welfare programs, we use a detailed micro simulation model to generate accurate budget sets for each work-welfare combination. We also use high-quality data on earnings and other types of incomes obtained both from employers and from income tax records. The results suggest that labor supply among two-parent families in Sweden is quite inelastic. A policy simulation designed to increase labor supply incentives for low income families generated substantial positive welfare effects, despite only minor changes in labor supply and in welfare participation.