Tax-benefit systems, in-work poverty and the reconciliation of work and family life

The rise in part-time work has been one of the most pronounced developments in the Austrian labour market in recent years. As the overall system of taxes, benefits and the costs of childcare is not neutral regarding the way individuals contribute to household earnings, it affects individual financial incentives to work as well as the distribution of income and poverty. The project aims at investigating these interactions and is divided into two parts: First, we update the WIFO tax-benefit micro-simulation model and extend a standard structural discrete-choice labour supply function by taking into account a number of novel features that are likely to improve the accuracy of labour supply estimations. Second, building upon the work in part one, we examine the efficiency and distributional effects of alternative in-work policies intended to promote employment and support low-income families.