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We consider the impact of Tax credits and income support programs on female education choice, employment, hours and human capital accumulation over the life-cycle. We thus analyze both the short run incentive effects and the longer run implications of such programs. By allowing for risk aversion and savings we are also able to quantify the insurance value of alternative programs. We find important incentive effects on education choice, and labor supply, with single mothers having the most elastic labor supply. Returns to labour market experience are found to be substantial but only for full-time employment, and especially for women with more than basic formal education. For those with lower education the welfare programs are shown to have substantial insurance value. Based on the model marginal increases to tax credits are preferred to equally costly increases in income support and to tax cuts, except by those in the highest education group.
Authors
CPP Co-Director
Richard is Co-Director of the Centre for the Microeconomic Analysis of Public Policy (CPP) and Senior Research Fellow at IFS.
Research Fellow Yale University
Costas is a Research Fellow of the IFS and a Professor of Economics at Yale University and a Visiting Professor at University College London.
Research Fellow Financial Conduct Authority
Jonathan is a Research Fellow at the IFS and a Technical Specialist in the Economics Department at the Financial Conduct Authority.
Deputy Research Director
Monica is a Deputy Research Director and Professor of Economics at the University of Bristol, with an interest in Labour, Family and Public Economics.
Report details
- DOI
- 10.3386/w19007
- Publisher
- National Bureau of Economic Research
Suggested citation
Blundell, R et al. (2013). Female Labour Supply, Human Capital and Welfare Reform. London: National Bureau of Economic Research. Available at: https://ifs.org.uk/publications/female-labour-supply-human-capital-and-welfare-reform (accessed: 20 April 2024).
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