Propuesta de implantación de políticas de complemento salarial en el Ingreso Mínimo Vital y en el IRPF: un análisis empírico con EUROMOD

Abstract

This paper analyzes the effect of two complementary making work pay policies using EUROMOD. The first policy is targeted to households in severe poverty and has been designed as a wage complement on the Ingreso Mínimo Vital (IMV). The second has a broader coverage and consist on a refundable tax credit for individuals with low wages. We analyze the effects of these policies on poverty, income distribution and labor market participation. The results show that these policies have positive effects on poverty reduction, as they significantly improve the income levels of households participating in the labor market, especially for households with children. At the extensive margin, disincentives to labor market participation are reduced, maintaining adequate levels of protection against unemployment. At the intensive margin, they slightly soften the disincentive on labor market participation of households in severe poverty.