Demand for Childcare Services and Labour Supply in Australian Families

This article provides empirical findings on non-parental childcare use and simulates the effect of childcare costs on labour supply in Australia.     

Abolishing the Tax‐Free Threshold in Australia: Simulating Alternative Reforms*

This paper examines the role of the tax‐free income tax threshold in a complex tax and transfer system consisting of a range of taxes and benefits, each with its own taper rates and thresholds. Considering a tax and benefit system with benefit taper rates whereby some benefits are received by income groups other than those at the bottom of the distribution, it is suggested that a tax‐free threshold is not a necessary requirement to achieve redistribution. Four alternative policy changes, each involving the elimination of the tax‐free threshold in Australia and designed to achieve approximate revenue neutrality, were examined using the Melbourne Institute Tax and Transfer Simulator. A range of implications were examined, including labour supply responses to tax changes and the effects of policy changes on inequality and social welfare. The results demonstrate that it is possible to eliminate the tax‐free threshold under approximate overall revenue and distribution neutrality, but that it is impossible to improve labour supply incentives at the same time. In order to achieve improved incentives, either revenue or distribution neutrality has to be sacrificed.     

Flattening the Effective Marginal Tax Rate Structure in Australia: Policy Simulations Using the Melbourne Institute Tax and Transfer Simulator

This article uses the Melbourne Institute Tax and Transfer Simulator to examine the effects of a reduction in the means‐tested benefit taper, or withdrawal, rates in Australia to 30 per cent. That is, all taper rates of 50 per cent and 70 per cent in the March 1998 benefit system are reduced to 30 per cent, while leaving all basic benefit levels unchanged. This change is therefore expected to ‘flatten’ the tax structure by reducing the high marginal tax rates applying to those with relatively low incomes and increasing the marginal tax rates of medium incomes. Simulations in which all individuals are assumed to remain at their pre‐reform labour supply levels are compared with behavioural simulations in which the majority of individuals are free to adjust the number of hours worked. The results reflect only the supply side of the labour market. The database used is the 1997‐98 Survey of Income and Housing Costs, so that weekly incomes are based on the financial year 1997‐98. The comparison shows that, for sole parents, accounting for behavioural effects of the reform results in a lower estimated expenditure for government, whereas for couples, accounting for behavioural effects results in a higher estimated expenditure.     

Pen to the tiller: Land reform and social mobility across the 1979 Iranian revolution

Giovanni Arrighi joined together questions of agrarian political economy with questions concerning the livelihoods of rural migrants and the fate of peasant communities as they dissipated. In this article, we apply Arrighi's concerns to the case of Iran to examine how processes of agrarian transformation link with trends in social stratification and upward mobility. First, we argue that land reform implemented during the reign of Mohammad Reza Shah Pahlavi contributed to a heterogenous social differentiation of the Iranian peasantry. Second, we claim that the widening of access to credentials fostered by Ayatollah Ruhollah Khomeini's Islamic Republic laid the tracks by which peasants and rural households could convert landholding assets into newly accessible forms of cultural capital. The benefits of these transformational processes, however, fell disproportionately to the rural middle strata created under the Pahlavi monarchy. Through the use of a new survey dataset, we show how pre‐1979 land reform in Iran favoured segments of the peasantry, not for those who remained in rural agricultural production, but instead for those who utilized landholdings as a means to transfer status and opportunities to their children after the 1979 Iranian revolution.     

Moving from Unemployment to Permanent Employment: Could a Casual Job Accelerate the Transition?

This article compares the time taken to exit from unemployment to permanent work with the time taken to exit from unemployment to permanent work through casual work.