In-work support through the tax-benefit system has proved to be an effective way of
increasing labour supply of lone mothers and first earners in couples in a number of
OECD countries. At the same time these instruments usually create negative
employment incentives for secondary earners. This in turn reduces the potential of inwork
support to address the joint objectives of higher employment and lower poverty
levels. In this paper we examine labour supply implications of a diverse set of possible
reforms to the main elements of tax and benefit support of families with children in
Poland. We show how an adequate combination of increased generosity of the tax and
benefit system with the introduction of a “double earner” premium may result in
increased labour supply of first and second earners in couples and concentrate the
response in the lower half of the income distribution thus increasing the potential of inwork
support to alleviate poverty.