Selective Reductions in Labor Taxation Labour Market Adjustments and Macroeconomic Performance

Anna Batyra () and Henri Sneessens

No 2010021, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: We use a calibrated general equilibrium model with heterogeneous labor and search to evaluate the quantitative effects of various labor tax cut scenarios. The focus is on skill heterogeneity combined with downward wage rigidities at the low end of the skill ladder. Workers can take jobs for which they are overeducated. We compare targeted and non-targeted tax cuts, both with or without over-education effects. Introducing over-education changes substantially the employment, productivity and welfare effects of a tax cut, although tax cuts targeted on the least skilled workers always have larger effects.

Keywords: Minimum Wage; Job Creation; Job Destruction; Job Competition; Search Unemployment; Taxation; Computable General Equilibrium Models (search for similar items in EconPapers)
JEL-codes: C68 E24 J64 (search for similar items in EconPapers)
Pages: 12
Date: 2010-01-31
New Economics Papers: this item is included in nep-cmp, nep-dge and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://sites.uclouvain.be/econ/DP/IRES/2010021.pdf (application/pdf)

Related works:
Journal Article: Selective reductions in labor taxation: Labor market adjustments and macroeconomic performance (2010)
Working Paper: Selective Reductions in Labor Taxation: Labor Market Adjustments and Macroeconomic Performance (2010)
Working Paper: Selective Reductions in Labor Taxation, Labour Market Adjustments and Macroeconomic Performance (2010)
Working Paper: Selective Reductions in Labour Taxation: Labour Market Adjustments and Macroeconomic Performance (2007)
Working Paper: Selective Reductions in Labour Taxation: Labour Market Adjustments and Macroeconomic Performance (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2010021

Access Statistics for this paper

More papers in LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) Place Montesquieu 3, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Virginie LEBLANC ().