Notes: Gross income is the sum of the gross employment incomes of both spouses. The participation tax rate is one minus the change in disposable income taking place upon the transition from non-employment to employment, expressed as a share of gross income that would be earned in the case of employment. In panel a., the benefit amount and disposable income at a gross income of zero are identical for the WTC and ETC scenarios; therefore, the markers overlap, i.e., the one showing the WTC scenario is hidden. In Croatia in 2015, the minimum gross wage for full-time employment was approximately 38% of the average gross wage. Therefore, the actors A2 and B2 cannot be legally employed at a gross wage below the minimum wage. Accordingly, we show the results for gross wages beyond 38% of the AGW (represented by full lines and markers on the graphs). However, for the sake of illustration, the points below 38% of the AGW are also shown (represented by dotted lines on the graphs).
Source: Authors’ simulations using miCROmod.