Herwig Immervoll - Academia.edu (original) (raw)

Papers by Herwig Immervoll

The statistical data for Israel are supplied by and under the responsibility of the relevant Isra... more The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. 100 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 Increase spending Decrease spending "Don't know"/refusal Maintain current levels of spending Panel A. These days, some government are cutting spending to reduce their debt. Other governments are maintaining or increasing their spending to stimulate economic growth. What is your view ? Should the government... Panel B. Do you think the government should increase, maintain, or decrease spending on the welfare state?

The Journal of Economic Inequality

Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research pu... more Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

This series is designed to make available to a wider readership selected labour market, social po... more This series is designed to make available to a wider readership selected labour market, social policy and migration studies prepared for use within the OECD. Authorship is usually collective, but principal writers are named. The papers are generally available only in their original language-English or French-with a summary in the other.

International Journal of Microsimulation, 2009

Tax-benefit models provide tools for policy analyses that should enable researchers to focus thei... more Tax-benefit models provide tools for policy analyses that should enable researchers to focus their attention on formulating policy scenarios and analysing their effects. From the users" and the developers" points of view, numerous characteristics and features are desirable to maximise the model"s usefulness. A model framework that offers generalised components essential for tax-benefit modelling while at the same time providing a large degree of flexibility in defining the specific parameters can be re-used for a multitude of modelling purposes. This paper discusses issues arising in the construction of such a general framework and illustrates possible approaches by reference to the the framework developed for construction of the EUROMOD tax-benefit model. EUROMOD is an integrated tax-benefit microsimulation model covering 15 (pre 2004) countries that are members of the European Union (Immervoll et al, 1999) as well as 4 of the New Member States. Implementing this many tax-benefit systems in one single consistent framework requires a robust yet flexible structure. The framework needs to reflect the basic structural characteristics of tax-benefit systems while leaving enough room for a diversity of particular instruments and rules. This paper outlines the general model framework adopted. We argue that, apart from its direct usefulness for EUROMOD, the framework has far wider applicability as a general approach to static tax-benefit microsimulation modelling.

Camb J Econ, 2005

The authors use the European Union-wide tax-benefit model, EUROMOD, to establish baseline rates o... more The authors use the European Union-wide tax-benefit model, EUROMOD, to establish baseline rates of relative poverty in 1998 for each of the Member States and then explore their sensitivity to (a) an increase in unemployment, (b) real income growth and (c) an increase in earnings inequality. They find that poverty rates are sensitive to such 'macro-level' changes but that the size-and in some cases the direction-of the effect varies across countries. If such indicators are to be used in judging the effectiveness of social policies, it is important that differences in responsiveness are fully understood.

Cesifo Working Paper Series, 2011

The distributional consequences of the recent economic crisis are still broadly unknown. While it... more The distributional consequences of the recent economic crisis are still broadly unknown. While it is possible to speculate which groups are likely to be hardest-hit, detailed distributional studies are still largely backward-looking due to a lack of real-time microdata. This paper studies the distributional and fiscal implications of output changes in Germany 2008-2009, using data available prior to the economic downturn. We first estimate labor demand on 12 years of detailed, administrative matched employer-employee data. The distributional analysis is then conducted by transposing predicted employment effects of actual output shocks to householdlevel microdata. A scenario in which labor demand adjustments occur at the intensive margin (hour changes), close to the German experience, shows less severe effects on the income distribution compared to a situation where adjustments take place through massive layoffs. Adjustments at the intensive margin are also preferable from a fiscal point of view. In this context, we discuss the cushioning effect of the tax-benefit system and the conditions under which German-style work-sharing policies can be successful in other countries.

This paper analyses how inflation-induced erosions of nominally defined amounts built into releva... more This paper analyses how inflation-induced erosions of nominally defined amounts built into relevant tax rules ("bracket creep") alter distributional and revenue-generating properties of income taxes and social insurance contributions. Using a multi-country tax-benefit model, it provides quantitative estimates for Germany, the Netherlands and the UK. In the absence of automatic inflation adjustment mechanisms, effects on individual tax burdens can be substantial even with low inflation. Bracket creep is found to reduce tax progressivity. At the same time, overall tax revenues increase. This second effect more than compensates for the decline in progressivity and leads to an overall increase of relevant redistribution measures. Existing adjustment regimes used in the Netherlands and the UK are successful at preventing large tax burdens changes resulting from inflation-induced nominal income changes.

Two weeks before the Euro was introduced into circulation as the common currency in twelve Member... more Two weeks before the Euro was introduced into circulation as the common currency in twelve Member States (on 1 st January 2002) the European Union adopted a set of commonly agreed indicators for social inclusion. Among them are some income-based indicators, including poverty measures based on percentages of median household incomes. It is to be hoped that Member States can devise policies that will reduce poverty and social exclusion and that these reductions will be reflected in improvements in the chosen indicators. However, the positive effects of policy initiatives may be mitigated by other, independent changes in the economy or society. These "macro" changes may inhibit the movement of the indicator in the intended direction or may indeed result in a shift in an adverse direction. There is no reason to believe that the sensitivity of indicators is the same across countries (or across indicators). If incomebased indicators are to be used as generally accepted measures of the outcomes of policy, then it is important that the responsiveness of the indicators to other influences is fully understood. Clearly the relationships between macro-and micro-levels are complex and this paper uses a range of simple, simulated changes to illustrate possible consequences of wider changes. We use the EU-wide tax-benefit model, EUROMOD to establish baseline indicators using simulated incomes for 14 of the Member States and then explore the sensitivity of these indicators to (a) an increase in unemployment, (b) failure to index social and fiscal policies for inflation or real income growth and (c) an increase in earnings inequality.

Chapter 1 References 2. Growth, Employment, and Social Cohesion: Post-Crisis Employment Generatio... more Chapter 1 References 2. Growth, Employment, and Social Cohesion: Post-Crisis Employment Generation for Men, Women, and Youth in Turkey 2.1 Introduction 2.2 Drivers of Increased Employment Elasticity of Growth in Post-Crisis Turkey 2.2.1 Increase in employment in labor-intensive sectors (the composition effect) 2.2.2 Increased employment elasticity within sectors 2.3 The Beneficiaries of Employment Generation in the Post-Crisis Period 2.4 Trend Changes in the Growth of Employment in the Post-Crisis Period 2.5 Was There a Structural Change in Female Labor Force Participation in the Post-Crisis Period? 2.5.1 Main trends 2.5.2 Employment by education and age 2.5.3 Other determinants of female labor force participation 2.6 Conclusion and Policy Outlook Chapter 2 References Annex 2.1: Data Sources Annex 2.2: Pseudo-Panel Analysis Annex 2.3: Multinomial Logit Model i GOOD JOBS IN TURKEY Victoria Levin (WB), Carola Gruen (WB), Ahmet Levent Yener (WB), Altan Aldan (WB), Tolga Cebeci (WB), Gökhan Güder (MoD), Sinem Çapar (MoD), Meltem Aran (Development Analytics), Nazlı Aktakke (Development Analytics), and Bülent Anıl and Ayşenur Acar (BETAM). Cristobal Ridao-Cano (WB) and Herwig Immervoll (OECD) initiated the dialogue to start this work and conceptualized the components and analytical focus of the report and its chapters. We thank the following advisors for cutting-edge inputs and comments during thematic brainstorming sessions; on chapter 3: Mediha Agar (WB), Mary Hallward-Driemeier (WB), Marc Schiffbauer (WB), William Maloney (WB), Marcela Eslava (Universidad de Los Andes, Bogota), and Bob Rijkers (WB); on chapter 4: Pierella Paci (WB), Sergio Oliveri (WB), Carolina Sanchez (WB), Joao Pedro Azevedo (WB), and Diego Angel-Urdinola (WB). Amy Gautam substantially improved the report through her professional editing. Overall guidance was provided by Martin Raiser (Country Director for Turkey, WB), Roberta Gatti (Sector Manager, Human Development Economics, Europe and Central Asia, WB), and Ana Revenga (Director, Human Development, Europe and Central Asia, WB).

International Tax and Public Finance, 2012

Macro-level changes can have substantial effects on the distribution of resources at the househol... more Macro-level changes can have substantial effects on the distribution of resources at the household level. While it is possible to speculate about which groups are likely to be hardesthit, detailed distributional studies are still largely backward-looking. This paper suggests a straightforward approach to gauge the distributional and fiscal implications of large output changes at an early stage. We illustrate the method with an evaluation of the impact of the 2008-2009 crisis in Germany. We take as a starting point a very detailed administrative matched employer-employee dataset to estimate labor demand and predict the effects of output shocks at a disaggregated level. The predicted employment effects are then transposed to household-level microdata, in order to analyze the incidence of rising unemployment and reduced working hours on poverty and inequality. We focus on two alternative scenarios of the labor demand adjustment process, one based on reductions in hours (intensive margin) and close to the German experience, and the other assuming extensive margin adjustments that take place through layoffs (close to the US situation). Our results suggest that the distributional and fiscal consequences are less severe when labor demand reacts along the intensive margin.

Iza Policy Papers, 2011

The fallout from the global economic downturn of 2008-09 is a continuing source of stress on fami... more The fallout from the global economic downturn of 2008-09 is a continuing source of stress on families and a constraint on government policies. How can social policies contribute to a quick and equitable recovery from the crisis and how can they best respond to the difficulties that households continue to face? What role can and should social policy budgets play in improving the budget outlook of countries facing unsustainable government debt? And how should governments prioritise different areas of social spending when faced with heightened demand for support but, often, much reduced fiscal space? This paper addresses these questions in light of countries' experiences during the most recent and earlier economic downturns.

SOEPpapers on Multidisciplinary Panel Data Research at DIW Berlin This series presents research f... more SOEPpapers on Multidisciplinary Panel Data Research at DIW Berlin This series presents research findings based either directly on data from the German SocioEconomic Panel Study (SOEP) or using SOEP data as part of an internationally comparable data set (e.g. CNEF, ECHP, LIS, LWS, CHER/PACO). SOEP is a truly multidisciplinary household panel study covering a wide range of social and behavioral sciences:

Macro-based summary indicators of effective tax burdens cannot provide information on the level o... more Macro-based summary indicators of effective tax burdens cannot provide information on the level or distribution of the marginal effective tax rates thought to influence household behaviour. They also do not capture differences in effective tax rates facing different subgroups of the population. I use EUROMOD, an EU-wide tax-benefit microsimulation model, to compute distributions of average and marginal effective tax rates across the household population in fourteen European Union Member States. Using different definitions of Ã«net taxesÃ, the tax base and the unit of analysis I present a range of measures showing the contribution of the tax-benefit system to household incomes; average effective tax rates applicable to income from labour; and marginal effective tax rates faced by working men and women. In a second step, these measures are broken down to separately analyse the influence of each type of tax-benefit instrument. The results show that measures of effective tax rates vary...

Macro-based effective tax rate (ETR) measures do not provide information on the level or distribu... more Macro-based effective tax rate (ETR) measures do not provide information on the level or distribution of marginal effective tax rates thought to influence household behaviour. They also do not capture differences in average ETRs facing different population sub-groups. I use EUROMOD, an EUwide tax-benefit model, to derive distributions of average and marginal ETR measures for fourteen countries. Results for each country show how many and which types of individuals face different ETR levels. I consider effective tax burdens on labour income as well as the marginal tax rates faced by working men and women. Results are broken down to isolate the influence of income taxes, social contributions and various types of social benefits ... Les taux d’imposition effectifs basés sur des données macros ne fournissent pas d’information sur le niveau ou sur la distribution des taux d’imposition effectifs marginaux jugés pour influencer le comportement des ménages. Ils ne permettent pas non plus de ...

Macro-based effective tax rate (ETR) measures do not provide information on the level or distribu... more Macro-based effective tax rate (ETR) measures do not provide information on the level or distribution of marginal effective tax rates thought to influence household behaviour. They also do not capture differences in average ETRs facing different population sub-groups. I use EUROMOD, an EU-wide tax-benefit model, to derive distributions of average and marginal ETR measures for fourteen countries. Results for each country show how many and which types of individuals face different ETR levels. I consider effective tax burdens on labour income as well as the marginal tax rates faced by working men and women. Results are broken down to isolate the influence of income taxes, social contributions and various types of social benefits.

Why could political incentives be different during election times? This article provides answers ... more Why could political incentives be different during election times? This article provides answers to this question using a career-concern model of political cycles. The analysis in the article is also relevant to understanding other agency relationships in which an important part of compensation is decided on infrequently.

The Journal of Economic Inequality

International Journal of Microsimulation, 2009

Camb J Econ, 2005

Cesifo Working Paper Series, 2011

International Tax and Public Finance, 2012

Iza Policy Papers, 2011

Macro-based effective tax rate (ETR) measures do not provide information on the level or distribu... more Macro-based effective tax rate (ETR) measures do not provide information on the level or distribution of marginal effective tax rates thought to influence household behaviour. They also do not capture differences in average ETRs facing different population sub-groups. I use EUROMOD, an EU-wide tax-benefit model, to derive distributions of average and marginal ETR measures for fourteen countries. Results for each country show how many and which types of individuals face different ETR levels. I consider effective tax burdens on labour income as well as the marginal tax rates faced by working men and women. Results are broken down to isolate the influence of income taxes, social contributions and various types of social benefits.