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Female Labour Supply, Human Capital and Welfare Reform

Authors: Richard Blundell , Monica Costa Dias , Costas Meghir and Jonathan Shaw
Date: 22 June 2015
Type: Mimeos,

Abstract

We estimate a dynamic model of employment, human capital accumulation - including education, and savings for women in the UK, exploiting policy changes. We analyse both the incentive eff ects and the welfare implications of tax credits and income support programs and we account for their insurance value. We nd important incentive e ffects on education choice and labor supply, with single mothers having the most elastic labor supply. Returns to experience increase with education, but experience only accumulates when in full-time employment. Finally, marginal increases in tax credits are preferred to equally costly income support or to tax cuts.

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