ugo colombino | Università degli Studi di Torino (original) (raw)

Papers by ugo colombino

The purpose of this paper is to present an exercise where we identify optimal income tax rules un... more The purpose of this paper is to present an exercise where we identify optimal income tax rules under the constraint of fixed tax revenue. To this end, we estimate a microeconomic model with 78 parameters that capture heterogeneity in consumption-leisure preferences for singles and couples as well as in job opportunities across individuals based on Norwegian household data for 1994. The estimated model is for a given tax rule used to simulate the choices made by single individuals and couples. Those choices are therefore generated by preferences and opportunities that vary across the decision units. Differently from what is common in the literature, we do not rely on a priori theoretical optimal taxation results, but instead we identify optimal tax rules-within a class of 6parameter piece-wise linear rules-by iteratively running the model until a given social welfare function attains its maximum under the constraint of keeping constant the total net tax revenue. We explore a variety of social welfare functions with differing degree of inequality aversion and also two alternative social welfare principles, namely equality of outcome and equality of opportunity. All the social welfare functions turn out to imply an average tax rate lower than the current 1994 one. Moreover, all the optimal rules imply-with respect to the current rule-lower marginal rates on low and/or average income levels and higher marginal rates on sufficiently high income levels. These results are partially at odds with the tax reforms that took place in many countries during the last decades. While those reforms embodied the idea of lowering average tax rates, the way to implement it has typically consisted in reducing the top marginal rates. Our results instead suggest to lower average tax rates by reducing marginal rates on low and average income levels and increasing marginal rates on very high income levels.

Globalization and automation might imply deep changes on the labour market. An important policy i... more Globalization and automation might imply deep changes on the labour market. An important policy issue is whether and how the tax-transfer rules should be reformed to cope with those changes. While the prevailing response has consisted of more sophisticated designs of mean-testing and targeting, we also witness an increasing interest in policies inspired by simplicity and universality. In this paper we take the latter route. Using a combination of behavioural microsimulation and numerical optimization, we look for a social welfare optimal tax-transfer rule within a flexible class where total household disposable income is a 4th polynomial in total household taxable income. We use a model of household labour supply that makes it possible to account for equilibrium constraints and to evaluate the effects of exogenous labour demand shocks. We consider two stylized scenarios: the Jobless Economy (the robots take over 10% of jobs at every skill-level) and the Polarized Economy (the robots...

What's Best for Women: Gender Based Taxation, Wage Subsidies or Basic Income? * We use a microeco... more What's Best for Women: Gender Based Taxation, Wage Subsidies or Basic Income? * We use a microeconometric model of household labour supply in order to evaluate, with Italian data, the behavioural and welfare effects of gender based taxation (GBT) as compared to other policies based on different optimal taxation principles. The comparison is interesting because GBT, although technically correct, might face implementation difficulties not shared by other policies that in turn might produce comparable benefits. The simulation procedure accounts for the constraints implied by fiscal neutrality and market equilibrium. Our results support to some extent the expectations of GBT's proponents. However it is not an unquestionable success. GBT induces a modest increase of women's employment, but similar effects can be attained by universal subsidies on low wages. When the policies are evaluated in terms of welfare, GBT ranks first among single women but for the whole population the best policies are subsidies on low wages, unconditional transfers or a combination of the two.

SSRN Electronic Journal, 2020

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.

Reading list What follows is the list of references cited in the presentation. The main reference... more Reading list What follows is the list of references cited in the presentation. The main reference is marked with (***). Optionally:-Those interested in the microeconometric model used in the empirical example might look at the paper marked with (**).-Those interested in the social welfare evaluation method might look at the papers marked with (*). The other papers are general references or application of similar models. (*)

Population ageing and fiscal sustainability: An integrated micro-macro analysis of required tax c... more Population ageing and fiscal sustainability: An integrated micro-macro analysis of required tax changes Most studies on the economic consequences of ageing rely on Computable General Equilibrium (CGE) models that account for feedback mechanisms through changes in relative prices, tax bases etc. However, since individual labour supply behaviour is considered to be a key element in CGEanalyses of fiscal sustainability problems, the results of these analyses may depend crucially on how the labour supply behaviour is modelled. The current practice of combining a simplified representation of the tax and transfer system with the labour supply behaviour of a few representative agents may render a misleading description of incentives and revenue effects. The purpose of this paper is to demonstrate the importance of using an alternative strategy by integrating a detailed microeconometric model of labour supply, that is sufficiently flexible to capture a large variety of labour supply respons...

Differently from most European countries and despite the recommendations on the part of the Europ... more Differently from most European countries and despite the recommendations on the part of the European Commission, Italy still misses a sufficiently systematic and nationwide mechanism of income support. In this paper we explore the feasibility, the desirability and the features of a universal policy of minimum income in Italy. We use a microeconometric model and a social welfare methodology in order to evaluate various alternatives mechanisms. We simulate the effects and the social welfare performance of 15 reforms resulting from three versions of five basic types of universal income support mechanism: Guaranteed Minimum Income (GMI), Unconditional Basic Income (UBI), Wage Subsidy (WS) and two mixed systems: GMI+WS and UBI+WS. As a welfare evaluation criterion we adopt the Gini Social Welfare function. The simulation exercise has two distinctive features that are not common in the tax-reforms literature: first, all the reforms are calibrated so as to preserve fiscal neutrality; secon...

Springer Proceedings in Mathematics & Statistics, 2017

This article proposes Bayesian methods for microsimulation models and for policy evaluations. In ... more This article proposes Bayesian methods for microsimulation models and for policy evaluations. In particular, the Bayesian Multinomial Logit and the Bayesian Multinomial Mixed Logit models are presented. They are applied to labour-market choices by single females and single males, enriched with EUROMOD microsimulated information, to evaluate fiscal policy effects. Estimates using the two Bayesian models are reported and compared to the results stemming from a standard approach to the analysis of the phenomenon under consideration. Improvements in model performances, when Bayesian methods are introduced and when random effects are included, are outlined. Finally, ongoing work, based on nonparametric model extensions and on analysis of work choices by couples is briefly described.

We present an exercise in empirical optimal taxation for a sample of European countries from thre... more We present an exercise in empirical optimal taxation for a sample of European countries from three areas: Southern, Central and Northern Europe. For each country, we estimate a microeconometric model of labour supply for both couples and singles. A procedure that simulates the households’ choices under given tax-transfer rules is then embedded in a constrained optimization program in order to identify optimal rules under the public budget constraint. The optimality criterion is the class of Kolm's social welfare function. The tax-transfer rules considered as candidates are members of a class that includes as special cases various versions of the Negative Income Tax: Conditional (means-tested) Basic Income, Unconditional Basic Income, In-Work Benefits and General Negative Income Tax, combined with a Flat Tax above the exemption level. The analysis in most cases show that: the General Negative Income Tax strictly dominates the other rules, including the current ones; the Unconditi...

The design of a nationwide policy of minimum income or basic income in Italy, comparable to the p... more The design of a nationwide policy of minimum income or basic income in Italy, comparable to the policies implemented in most European countries, is still a working enterprise. A first proposal to fill the gap was formulated by the ‘Commissione Onofri’ (Onofri 1997) appointed by a Centre-Left Government. The proposal was tested in a sample of local areas during the following two years. However, the test was stopped when a Centre-Right Government came to power, which also transferred the competence of income support policies to the regions, which had effectively been responsible for implementing basic income policies in the previous two decades. More recently, a national basic income scheme, ‘Reddito di Inclusione’ (RdI) was implemented in 2018. It addresses the population in absolute poverty. To put this into perspective, it is meant to be universal, although the funds to date are sufficient to cover about half of the target population. After the last political elections of March 4, ...

We thank Andrea Cornia and Valeric Leehene for their useful comments.

International Journal of Microsimulation, 2017

SSRN Electronic Journal, 2018

ABSTRACT I decisori politici possono incontrare la necessità di stimare il valore economico dei b... more ABSTRACT I decisori politici possono incontrare la necessità di stimare il valore economico dei beni che non hanno un mercato. Uno dei metodi utilizzabili al riguardo è quello della “valutazione contingente” che, nel presente studio, viene impiegato per stimare la disponibilità a pagare per una diminuzione dell’inquinamento da rumore relativamente ad un campione di abitanti di Torino.

SSRN Electronic Journal, 2008

* This paper uses EUROMOD version 27a. EUROMOD is continually being improved and updated and the ... more * This paper uses EUROMOD version 27a. EUROMOD is continually being improved and updated and the results presented here represent the best available at the time of writing. Any remaining errors, results produced, interpretations or views presented are the authors' responsibility. EUROMOD relies on micro-data from twelve different sources for fifteen countries. This paper uses data from the European Community Household Panel (ECHP) User Data Base made available by Eurostat; the Survey of Household Income and Wealth (SHIW95) made available by the Bank of Italy; and the Family Expenditure Survey (FES), made available by the UK Office for National Statistics (ONS) through the Data Archive. Material from the FES is Crown Copyright and is used by permission. Neither the ONS nor the Data Archive bears any responsibility for the analysis or interpretation of the data reported here. An equivalent disclaimer applies for all other data sources and their respective providers.

Journal of Public Economics, 2003