Aperçu

Résumé (français)

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Résumé (anglais)

We use administrative tax data to estimate the effect of the Working Income Tax_x000D_
Benefit (WITB) on the labour supply of single, low-income workers in Canada. Our_x000D_
analytical approach exploits low knowledge of the program, which has two important_x000D_
implications for our research design and identification strategy. First, low program_x000D_
knowledge allows us to treat WITB as an unconditional income transfer. Second, it_x000D_
generates variation in benefit receipt both between and within eligible tax filers over_x000D_
time. We find that benefit receipt has a robust positive effect on employment for single_x000D_
low-income workers, suggesting the additional income helps workers remain attached_x000D_
to the labour market. We also find that WITB receipt reduces labour supply at the_x000D_
intensive margin of work. The positive extensive margin and negative intensive margin_x000D_
results are consistent with a labour-leisure choice model that incorporates the fixed_x000D_
costs associated with working.