Tax Credits, Income Support and Partnership Decisions

42 Pages Posted: 3 Dec 2007

See all articles by Dan Anderberg

Dan Anderberg

University of London, Royal Holloway College - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: November 2007

Abstract

This paper considers the potential impact of welfare benefits on the partnership status of women in the UK. Using recent policy reforms to identify the response rate I find that a GBP100/week welfare benefit "partnership penalty" reduces the probability of a woman having a partner by seven percentage points. I also use the model to explore the potential effects of the recent Tax Credit reforms on partnership rates; I find that while the 1999 WFTC reform improved partnership incentives this effect was effectively undone by the 2003 WTC/CTC reform.

Keywords: welfare benefits, tax credits, family structure

JEL Classification: H31, I38, J12

Suggested Citation

Anderberg, Dan, Tax Credits, Income Support and Partnership Decisions (November 2007). CESifo Working Paper No. 2147, Available at SSRN: https://ssrn.com/abstract=1046521 or http://dx.doi.org/10.2139/ssrn.1046521

Dan Anderberg (Contact Author)

University of London, Royal Holloway College - Department of Economics ( email )

Royal Holloway College
Egham
Surrey, Surrey TW20 0EX
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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