in-work benefit in Italy. The reforms are financed through the abolition of the existing tax credit targeted at inactive … people. In-work benefits are means-tested transfers given to individuals conditional on their employment status. The results …

two complementary approaches: a standard approach based on reported incomes in survey data, and a microsimulation approach …, where taxes and benefits are simulated. These two approaches may be expected to generate slightly different results … over-estimated in microsimulation procedures. However, we find that the two approaches do in fact produce reasonably …