ITEM METADATA RECORD
Title: Is ELIE a wasteful minimum income scheme?
Authors: Ooghe, Erwin
Schokkaert, Erik
Issue Date: Feb-2008
Publisher: K.U.Leuven, Faculty of Economics and Applied Economics : Department of Economics
Series Title: CES - Discussion paper series DPS 08.05 pages:1-18
Abstract: ELIE can be interpreted as a minimum income scheme, financed by lump-sum taxes. It may induce social waste as individuals with a low taste for working may opt for voluntary unemployment. We simulate the magnitude of this social waste with microdata for Belgium and compare ELIE with a firstbest scheme and a second-best scheme (based on a linear income tax), implementing the same minimum income. As expected, the social waste induced by ELIE is intermediate between the social waste induced by the first- and second-best schemes. Assumptions about the preferences of the voluntarily unemployed play a crucial role.
Publication status: published
KU Leuven publication type: IR
Appears in Collections:Research Center of Public Economics, Leuven
Department of Economics, Leuven - miscellaneous

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