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Work motivation effects of tax change proposals on employees
Kalíšková, Klára ; Münich, Daniel ; Šoltés, Michal
In this study, we analyse the impact of the changes to taxes and compulsory contributions for employees as proposed in the government's consolidation package unveiled in May 2023. We also look in detail at the impact of the restrictions on the low-income spouse allowance. While existing analyses focus primarily on quantifying redistributive effects and the impact on tax revenue, our analysis also looks at the transformation of incentives to work, i.e., incentives to work or not work and incentives to work more or less. We show how the proposal will change average, marginal and participation tax rates. While the average tax rate tells us about the tax burden on income and how much of the cost of labour is paid in taxes and levies, the other two indicators are related to the incentive to work. The marginal tax rate describes the incentive to work more or fewer hours, and the participation tax rate the incentive to participate in (or leave) the labour market. We thus provide an ex ante analysis of the expected effects of the government package on the tax rates of different groups of the population and their work motivation. Ex post analysis of the behavioural effects of this package, i.e. its impact on labour market participation or the number of hours worked, is naturally not possible before the actual implementation of the tax measures.
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How to save the state budget and correct the shortcomings in revenue taxation? Modelling the impact of changes to the personal (employee) income tax
Prokop, D. ; Kalíšková, Klára ; Šoltés, Michal ; Münich, Daniel ; Ostrý, M.
The structural deficit of the state budget is partly made up of a shortfall in tax revenues of about CZK 150 billion from 2020 onwards. In order to stabilize public finances, in addition to spending reforms, the maximum of these tax losses must be recovered. However, revenue can be strengthened also in other ways than by taxing employees. An estimated CZK 70 to 115 billion can be raised through other types of taxes. The proposed changes to the personal income tax (PIT) must therefore balance the expected collection from other sources and respond to other specificities of the income tax set-up in the Czech Republic. These include, among others, the small progression and the existence of a number of discounts that cannot be fully used by people with lower incomes. This leads to a relatively high burden on low-income employees with limited collection of the PTI.
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Is longer maternal care always beneficial? The impact of a four-year paid parental leave
Bičáková, Alena ; Kalíšková, Klára
We study the impact of an extension of paid family leave from 3 to 4 years on child long-term outcomes. Using a difference-in-differences design and comparing the first-affected with the last-unaffected cohorts of children, we find that an additional year of maternal care at the age of 3, which primarily crowded out enrollment into public kindergartens, had an adverse effect for children of loweducated mothers on human capital investments and labor-market attachment in early adulthood. The affected children were 12 p.p. more likely not to be in education, employment, or training (NEET) at the age of 21-22. The impact on daughters was larger and driven by a lower probability of attending college and higher probability of home production. Sons of low-educated mothers, on the other hand, were less likely to be employed. The results suggest that exposure to formal childcare may be more beneficial than all-day maternal care at the age of 3, especially for children with a lower socio-economic background.
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Income loss compensation during the Covid-19 pandemic: the winners and the losers
Kalíšková, Klára ; Zapletalová, Lucie
In this study we analyze how income compensation tools adopted by the Czech government in response to the Covid-19 pandemic were targeted at various groups of households. We reveal what proportion of the state’s overall expenditure on compensatory measures was targeted to the households most heavily affected by the pandemic. Despite the fact that the state spent a substantial amount on measures to compensate households for loss of income, the pandemic still had a substantially heavier impact on the poorer layers of society. This may manifest itself in the future as a deepening of existing problems with debt, executions and child poverty.\n
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Poverty and social benefits in socially excluded localities
Federičová, Miroslava ; Kalíšková, Klára ; Zapletalová, Lucie
This study presents a unique analysis of the living conditions of individuals and households in socially excluded localities (SELs) in terms of their income and exposure to poverty, compared to the average population. Special attention is paid to the receipt of social benefits and their effectiveness in reducing poverty. The analysis is based on unique data from living conditions in a socially excluded localities survey (SEL-SILC), conducted in 2020 by the Agency for Social Inclusion of the Czech Ministry of Regional Development, and from data from the Living Conditions Survey (EU-SILC) conducted by the Czech Statistical Office in 2020.
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We’ve done the math: here’s what the abolition of super-gross wages, reductions in social security contributions and the introduction of tax holidays will really mean
Kalíšková, Klára ; Šoltés, Michal
In the past year, the Czech Republic has seen plenty of changes in how employment income is taxed. Tax legislation adopted in December 2020 and July 2021 will reduce public revenues in 2022 by about 116 billion CZK. In other words, in 2022 employees will pay less than half the income tax that they would have paid without these tax changes. Average tax rates have been reduced for all income groups, although low-income employees will gain a disproportionately small slice of this savings pie. Employees in the lowest income quintile will save 500 CZK per month on average, whereas those in the highest income quintile will save an average of 4,000 CZK each month. The newly adopted tax legislation has substantially increased the share of employees who pay zero or negative income tax (i.e. receive what is known as the child tax bonus). There is thus little room for any further income tax reduction, especially for taxpayers who claim tax relief for their children or low-earning spouse.
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Career-breaks and maternal employment in CEE countries
Bičáková, Alena ; Kalíšková, Klára
Post-birth career breaks and their impact on mothers’ labor market outcomes have received considerable attention in the literature. However, existing evidence comes mostly from Western Europe and the US, where career breaks tend to be short. In contrast, Central and Eastern European (CEE) countries, where post-birth career interruptions by mothers are typically much longer, have rarely been studied. In the first part of this study, we place CEE countries into the EU context by providing key empirical facts related to the labor market outcomes of mothers and the most important factors that may affect them. Besides substantial differences between CEE countries and the rest of the EU, there is also large heterogeneity within CEE itself, which we explore next. In the second part, we review the main family leave and formal childcare policies and reforms that have occurred in CEE countries since the end of Communism and provide a comprehensive survey of the existing scientific evidence of their impact on maternal employment. While research on the causal impacts of these policies is scarce, several important studies have recently been published in high-impact journals. We are the first to provide an overview of these causal studies from CEE countries, which offer an insightful extension to the existing knowledge from Western Europe and the US.
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Kalíšková, Klára ; Flek, Vladislav (advisor) ; Fialová, Kamila (referee)
Active labour market policy is a widely used labour market intervention, which should increase the efficiency of labour market and help increase regular employment. However, its real impacts on labour market conditions are ambiguous. Although the literature concerning effectiveness of active labour market policy (ALMP) measures is extensive, there is no conclusive evidence regarding which ALMP measures are efficient and to what extent. The effectiveness of active labour market policy depends on many circumstances including characteristics of a given measure and conditions in a corresponding labour market. Therefore, decisions regarding implementation of ALMP measures should be based on high- quality and systematic evaluation of impacts of these measures in the given labour market. In the Czech Republic there is no regular system of active labour market policy evaluation, but the need for evaluation is even more urgent in the current economic crisis. The thesis offers both theoretical and empirical analysis of the active labour market policy effectiveness. Theoretical analysis introduces a comprehensive labour market model, which is grounded in the findings of existing literature and enables us to identify possible macroeconomic effects of ALMP measures on aggregate labour market situation. Second...
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Active labour market policy and its regional effects in the Czech Republic
Kalíšková, Klára ; Flek, Vladislav (advisor) ; Fialová, Kamila (referee)
Active labour market policy is a widely used labour market intervention, which should increase the efficiency of labour market and help increase regular employment. However, its real impacts on labour market conditions are ambiguous. Although the literature concerning effectiveness of active labour market policy (ALMP) measures is extensive, there is no conclusive evidence regarding which ALMP measures are efficient and to what extent. The effectiveness of active labour market policy depends on many circumstances including characteristics of a given measure and conditions on a given labour market. Therefore, decisions regarding implementation of ALMP measures should be based on high-quality and systematic evaluation of impacts of these measures in the given labour market. In the Czech Republic there is no regular system of active labour market policy evaluation, but the need of evaluation is even more serious in the current economic crisis. The thesis offers both theoretical and empirical analysis of the active labour market policy effectiveness. Theoretical analysis introduces a comprehensive labour market model, which results from findings of existing literature and enables us to identify macroeconomic effects of ALMP measures on aggregate labour market situation. Second part of this thesis introduces an...
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