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Tax, Welfare, and Pension Reforms in Slovenia: Implications for Work Incentives and Labor Participation

Author/Editor: Egoumé-Bossogo, Philippe | Tuladhar, Anita
Authorized for Distribution: December 1, 2006
Electronic Access: Free Full Text (PDF file size is 582KB)
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

Summary: The labor participation rate in Slovenia has been lower than in the EU-15 (the members states prior to May 2004), particularly for the low-income and older individuals. Using simulations of tax and social benefits and public pensions, the paper shows how the current tax, welfare, and pension systems create disincentives to work among these groups. The paper finds that incentives to retire early are strong for men, especially low-wage earners. The marginal effective tax rates also make it costly for low-income individuals to work and negatively affect the probability of participating. The paper proposes reform measures to enhance work incentives and labor participation, which will be crucial for dealing with population aging and for achieving higher potential growth in Slovenia.
 
Series: Working Paper No. 06/298
Subject(s): Labor supply | Slovenia | Labor policy | Tax reforms | Pensions | Early retirement incentives
Author's keyword(s): Labor particiaption | retirement | pensions | taxation | welfare | Slovenia
 
English  
    Published:   December 1, 2006        
    ISBN/ISSN:   1934-7073   Format:   Paper
    Stock No:   WPIEA2006298   Pages:   33
    Price:   US$18.00
       
     
Please address any questions about this title to publications@imf.org.