Labour supply and income distribution effects of the working income tax benefit: a general equilibrium microsimulation analysis

Table 1 Base run distribution of households and income sources

		One person	Couples	Couples with children	Lone parents	Other families	Total
Proportion		23.8	26.2	26.4	6.5	17.1	100
	With WITB phase-in	5.6	1.7	3.6	10.5	9.6	5.1
		(26.5)	(8.6)	(19.0)	(13.4)	(32.5)	100
	Social assistance recipients	10.1	3.5	4.9	25.7	15.9	9.0*
		(26.8)	(10.1)	(14.3)	(18.5)	(30.2)	100
	With WITB phase-out	26.7	9.9	9.1	20.9	29.6	17.8
		(35.8)	(14.6)	(13.5)	(7.6)	(28.4)	100
Labor income		51.4	55.4	79.5	70.4	65.4
		(10.7)	(21.3)	(46.6)	(3.8)	(17.6)	100
	High-skilled	20.5	22.2	28.2	19.0	19.1
	Medium-skilled	19.6	20.0	32.8	28.5	26.3
	Low-skilled	11.3	13.2	18.5	23.0	20.0
Self-employment income		11.1	6.3	10.7	4.9	5.2
		(3.2)	(3.3)	(8.6)	(0.4)	(1.9)	17.7**
Investment income		16.8	21.3	4.1	3.1	10.5
		(20.5)	(48.0)	(13.9)	(1.0)	(16.6)	100
Other income		20.7	17.0	5.8	21.6	18.9
		(21.0)	(31.9)	(16.6)	(5.8)	(24.8)	100
Total (income components)		100	100	100	100	100

Source: Authors’ calculations.
Note: See section 5 for more details on the phase-in and phase-out of the WITB. Figures in brackets represent the share in population or in total factor income.
* The proportion of families that receive social assistance benefits and are able to enter the labour market under certain conditions is only about 2.3 percent (see Table 3 and Scenario 2 below).
** Self-employment income represents capital income accruing to unincorporated businesses (17.7 percent). The share of incorporated businesses is 46,7 percent, while the remaining 35,6 percent represents capital allowance. All three components add to 100 percent.