Tax-benefit reforms and structural models for labour supply

This chapter exploits a very large administrative dataset on Dutch households to estimate labour supply elasticities for subgroups on the Dutch labour market. The estimated preferences are subsequently used to simulate the labour supply effects of potential reforms. It turns out that childless singles and men in couples hardly respond to changes in financial incentives, whereas single parents and women in couples with young children are quite responsive. Most of the response is in the number of persons employed, not in the response in hours worked per week per employed, while cross-elasticities for women in couples are non-negligible.