Christine Lietz

Swapping Policies: Alternative Tax-Benefit Strategies to Support Children in Austria, Spain and the UK

Three European countries with very different tax-benefit systems have recently substantially increased the level of support for children: Austria, Spain and the UK. Austria mainly makes use of universal benefits; Spain, tax concessions; and the UK means-tested benefits and tax credits. This article addresses the question of whether the chosen strategies are in fact the most effective for each country. It considers what would have happened if these countries had transformed the architecture of their systems in either of the other two directions. It makes use of EUROMOD, the European tax-benefit microsimulation model that is designed for making cross-country comparisons, to explore the distributional and, in particular, child poverty effects of budget-neutral alternatives. The results show that three factors – the level of spending, its structure, and the way it impacts in a particular national context – affect the outcomes to varying degrees.

A Short Introduction to EUROMOD: an Integrated European Tax-Benefit Model

By the mid-1990s the potential and usefulness of microsimulation models for researching tax-benefit systems had found widespread acceptance. Nevertheless, models were not widely available for independent or academic research in all countries of the European Union (EU). Even more important, carrying out consistent comparative tax-benefit microsimulation analysis was still an apparently impossible task. The time seemed ready for a European-Union-wide tax-benefit microsimulation model. Such a model, EUROMOD, is now available. This chapter is devoted to a short introduction to EUROMOD, including the reasons why it was built, its added value compared to existing models, the trade-offs faced by its builders and lessons that have been learnt from developing such an integrated model. Moreover, it aims to provide an insight into the wide range of possible applications of EUROMOD, underlined by summarizing some indicative findings of studies, which have used the model.

Labour market effects of apprenticeship training in Austria

In Austria, the apprenticeship system provides all citizens, including the less able among them, with a training option. Based on social security data, this article examines earnings and the stability of the occupational career of young workers with an apprenticeship diploma. As control groups, workers with a full‐time secondary school education and workers who did not receive any further education after completing their compulsory education were used. One of the main findings is that workers with an apprenticeship diploma are much better off than those without further education. The article finds the following ranking with respect to education: high‐school graduates, ex‐apprentices and unskilled workers, with more pronounced differences between ex‐apprentices and unskilled workers.