Document Type

Discussion Paper

Publication Date

4-1-2013

CFDP Number

1892R

CFDP Revision Date

2015-04-01

CFDP Pages

80

Abstract

We estimate a dynamic model of employment, human capital accumulation — including education, and savings for women in the UK, exploiting policy changes. We analyze both the incentive effects and the welfare implications of tax credits and income support programs and we account for their insurance value. We find important incentive effects 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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Economics Commons

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