Can Mothers Afford to Work in Poland? : Labor Supply Incentives of Social Benefits and Childcare Costs
This paper analyzes the incentives to labor supply faced by families, particularly mothers, with young children in the context of a recently introduced fertility promotion benefit in Poland. The paper is based on an adapted version of the Organisat...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/126541515423428331/Can-mothers-afford-to-work-in-Poland-labor-supply-incentives-of-social-benefits-and-childcare-costs http://hdl.handle.net/10986/29158 |
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okr-10986-291582021-06-08T14:42:48Z Can Mothers Afford to Work in Poland? : Labor Supply Incentives of Social Benefits and Childcare Costs Bargu, Ali Morgandi, Matteo WOMEN IN LABOR FORCE FEMALE LABOR FORCE PARTICIPATION SOCIAL ASSISTANCE FERTILITY CHILDCARE LABOR SUPPLY This paper analyzes the incentives to labor supply faced by families, particularly mothers, with young children in the context of a recently introduced fertility promotion benefit in Poland. The paper is based on an adapted version of the Organisation for Economic Co-operation and Development's Tax-Benefit Model, which estimates households' net earnings after taxes and social transfers at different levels of wages. Since the recent introduction of the 500 benefit, some households face steep marginal tax rates due to the benefit withdrawal rules. Single parents with two children, and second earners with one child can expect their income to increase by only 30 and 25 percent of the minimum wage, respectively, if they take up a job at minimum wage. If they must also pay for childcare, having all adults working can cause losses of up to 30 percent compared with if one adult stayed home. Although the 500 program radically contributed to reducing child poverty, in the absence of complementary reforms, these disincentives could affect more than half a million households, disproportionately in the lowest quintile. Vouchers for private childcare have been adopted by some municipalities in Poland to counter unmet demand for public nurseries. A 75 percent subsidy of typical childcare costs would restore the financial viability of low-paying work for mothers with young children. Alternative remedies include a reform of the eligibility and withdrawal rules of the 500 program. 2018-01-16T17:40:21Z 2018-01-16T17:40:21Z 2018-01 Working Paper http://documents.worldbank.org/curated/en/126541515423428331/Can-mothers-afford-to-work-in-Poland-labor-supply-incentives-of-social-benefits-and-childcare-costs http://hdl.handle.net/10986/29158 English Policy Research Working Paper;No. 8295 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Europe and Central Asia Poland |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
WOMEN IN LABOR FORCE FEMALE LABOR FORCE PARTICIPATION SOCIAL ASSISTANCE FERTILITY CHILDCARE LABOR SUPPLY |
| spellingShingle |
WOMEN IN LABOR FORCE FEMALE LABOR FORCE PARTICIPATION SOCIAL ASSISTANCE FERTILITY CHILDCARE LABOR SUPPLY Bargu, Ali Morgandi, Matteo Can Mothers Afford to Work in Poland? : Labor Supply Incentives of Social Benefits and Childcare Costs |
| geographic_facet |
Europe and Central Asia Poland |
| relation |
Policy Research Working Paper;No. 8295 |
| description |
This paper analyzes the incentives to
labor supply faced by families, particularly mothers, with
young children in the context of a recently introduced
fertility promotion benefit in Poland. The paper is based on
an adapted version of the Organisation for Economic
Co-operation and Development's Tax-Benefit Model, which
estimates households' net earnings after taxes and
social transfers at different levels of wages. Since the
recent introduction of the 500 benefit, some households
face steep marginal tax rates due to the benefit withdrawal
rules. Single parents with two children, and second earners
with one child can expect their income to increase by only
30 and 25 percent of the minimum wage, respectively, if they
take up a job at minimum wage. If they must also pay for
childcare, having all adults working can cause losses of up
to 30 percent compared with if one adult stayed home.
Although the 500 program radically contributed to reducing
child poverty, in the absence of complementary reforms,
these disincentives could affect more than half a million
households, disproportionately in the lowest quintile.
Vouchers for private childcare have been adopted by some
municipalities in Poland to counter unmet demand for public
nurseries. A 75 percent subsidy of typical childcare costs
would restore the financial viability of low-paying work for
mothers with young children. Alternative remedies include a
reform of the eligibility and withdrawal rules of the 500 program. |
| format |
Working Paper |
| author |
Bargu, Ali Morgandi, Matteo |
| author_facet |
Bargu, Ali Morgandi, Matteo |
| author_sort |
Bargu, Ali |
| title |
Can Mothers Afford to Work in Poland? : Labor Supply Incentives of Social Benefits and Childcare Costs |
| title_short |
Can Mothers Afford to Work in Poland? : Labor Supply Incentives of Social Benefits and Childcare Costs |
| title_full |
Can Mothers Afford to Work in Poland? : Labor Supply Incentives of Social Benefits and Childcare Costs |
| title_fullStr |
Can Mothers Afford to Work in Poland? : Labor Supply Incentives of Social Benefits and Childcare Costs |
| title_full_unstemmed |
Can Mothers Afford to Work in Poland? : Labor Supply Incentives of Social Benefits and Childcare Costs |
| title_sort |
can mothers afford to work in poland? : labor supply incentives of social benefits and childcare costs |
| publisher |
World Bank, Washington, DC |
| publishDate |
2018 |
| url |
http://documents.worldbank.org/curated/en/126541515423428331/Can-mothers-afford-to-work-in-Poland-labor-supply-incentives-of-social-benefits-and-childcare-costs http://hdl.handle.net/10986/29158 |
| _version_ |
1764468639606505472 |