The Future of Taxation in changing labour markets

Michael Christl, Ilias Livanos (ilias.livanos@cedefop.europa.eu), Andrea Papini and Alberto Tumino (alberto.tumino@ec.europa.eu)
Additional contact information
Ilias Livanos: European Centre for the Development of Vocational Training (CEDEFOP)
Alberto Tumino: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en

No 2022-02, JRC Working Papers on Taxation & Structural Reforms from Joint Research Centre

Abstract: This paper provides a first assessment of the fiscal and distributional consequences of the ongoing structural changes in the labour markets of EU Member States, mostly driven by technological progress and ageing. Cedefop 2020 Skill forecasts, EUROSTAT population projections and the forecast on pension expenditures from the 2021 Ageing Report depict a scenario of an ageing population, an inverted U-shaped unemployment trend and potentially polarising labour markets, the latter mostly driven by a surge in high-skill occupations. This analysis makes use of the microsimulation model EUROMOD and reweighting techniques to analyse the fiscal and distributional impacts of these trends, given the current tax-benefit policies. The results suggest that the macro trends will increase pressure on government budgets. The analysis also shows evidence of the capacity of the current tax-benefit systems to counterbalance the increases in income inequality and poverty risks triggered by the expected future labour markets developments.

Keywords: income distribution; budget; deficit; job polarisation; population ageing (search for similar items in EconPapers)
JEL-codes: H68 J11 J21 (search for similar items in EconPapers)
Date: 2022-03
New Economics Papers: this item is included in nep-age, nep-ban, nep-cmp, nep-cwa, nep-eec, nep-lab, nep-pbe and nep-pub
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Journal Article: The future of taxation in changing labour markets (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ipt:taxref:202202

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