Income Transfers is a stand-alone research project (18646) funded by the Anniversary fund (Jubiläumsfonds) of the Austrian National Bank (OENB – Österreichische Nationalbank) from 2021 to 2024. The project is conducted at the Institute of Statistics and Mathematical Methods in Economics at TU Wien.

Motivated by rising income inequality and wage stagnation for unskilled workers, in this project we assess the allocational and welfare implications of a set of policy instruments that are targeted to low-income families. In the United States and many European countries, some of these instruments such as earnings subsidies and minimum wages have recently received an increasing weight in anti-poverty policy, compared to traditional guaranteed income support programs. Yet, at least in some respects, their effects are still relatively little understood.

Our aim is to develop a series of structural models to shed more light on the optimal design of tax-transfer policies for low-income households. Among other aspects, we will study important complementarities between different policies, their differential effects in single and couple households, as well as potential price effects in general equilibrium.