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Labour Supply in New Zealand and the 2010 Tax and Transfer Changes

dc.contributor.authorCreedy, John
dc.contributor.authorMok, Penny
dc.date.accessioned2015-09-21T22:21:51Z
dc.date.accessioned2022-07-07T02:33:28Z
dc.date.available2015-09-21T22:21:51Z
dc.date.available2022-07-07T02:33:28Z
dc.date.copyright2015
dc.date.issued2015
dc.description.abstractThis paper examines the simulated labour supply responses to the personal tax and transfer policy changes introduced in New Zealand in 2010, and the implications for revenue and income distribution. The main changes examined are the increase in the GST rate from 12.5 to 15 per cent, along with reductions in personal income tax rates and increases in the main benefit payments and assistance to families with children, to compensate for the rise in GST. The simulated labour supply responses were obtained using the Treasury’s behavioural microsimulation model, TaxWell-B. The 2009/10 Household Economic Survey (HES) was used. The combined effect of all policy changes is to increase average labour supply slightly for all demographic groups. Labour force participation of sole parents is simulated to increase by 0.86 percentage points. In considering separate components, the change in income tax rates is found to have the largest effect on labour supply. This is not surprising given that it affected a large proportion of the population while the changes to the benefit system and assistance to families with children apply only to certain groups. The reforms are found to be approximately distribution neutral, in terms of the Gini inequality measure of after-tax income per adult equivalent person.en_NZ
dc.formatpdfen_NZ
dc.identifier.urihttps://ir.wgtn.ac.nz/handle/123456789/19355
dc.language.isoen_NZ
dc.publisherTe Herenga Waka—Victoria University of Wellingtonmul
dc.relation.ispartofseriesWorking Papers in Public Finance ; 11/2015en_NZ
dc.rightsNo known rights restriction other than copyrighten_NZ
dc.rights.rightsholderwww.victoria.ac.nz/sacl/about/cpfen_NZ
dc.rights.urihttps://www.wgtn.ac.nz/library/about-us/policies-and-strategies/copyright-for-the-researcharchive
dc.subjectTaxes and transfersen_NZ
dc.subjectLabour supplyen_NZ
dc.subjectDiscrete choice modelen_NZ
dc.subjectMicrosimulationen_NZ
dc.titleLabour Supply in New Zealand and the 2010 Tax and Transfer Changesen_NZ
dc.typeTexten_NZ
vuwschema.contributor.unitSchool of Accounting and Commercial Lawen_NZ
vuwschema.subject.anzsrcfor140211 Labour Economicsen_NZ
vuwschema.subject.anzsrcforV2380111 Labour economicsen_NZ
vuwschema.type.vuwWorking or Occasional Paperen_NZ

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