What Are the Economic and Labour Market Effects of an Income Tax Reduction Targeted at Older Workers?
Joint Authors
Harvey, Simon
Rainville, Bruno
Fougère, Maxime
Source
Economics Research International
Issue
Vol. 2012, Issue 2012 (31 Dec. 2012), pp.1-12, 12 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2012-07-04
Country of Publication
Egypt
No. of Pages
12
Main Subjects
Abstract EN
This paper explores the economic and labour market effects of implementing a tax reduction targeted at older workers.
The analysis is conducted with a life-cycle computable general equilibrium model calibrated on Canadian data.
The analysis shows that implementing a permanent income tax reduction for workers aged 60 and over has only small macroeconomic effects because the labour supply increase of older workers is partly offset by a reduction in the labour supply at core ages.
This induced effect also discourages savings and generates crowding out through private investment but has a favourable impact on lifetime economic welfare.
The macroeconomic impact is much larger when the income tax reduction is temporary because workers no longer reduce their hours at core ages and there is no reduction in savings.
However, since only current middle-aged and older workers benefit from the tax cut, a temporary income tax cut reduces intergenerational equity.
American Psychological Association (APA)
Fougère, Maxime& Harvey, Simon& Rainville, Bruno. 2012. What Are the Economic and Labour Market Effects of an Income Tax Reduction Targeted at Older Workers?. Economics Research International،Vol. 2012, no. 2012, pp.1-12.
https://search.emarefa.net/detail/BIM-473409
Modern Language Association (MLA)
Fougère, Maxime…[et al.]. What Are the Economic and Labour Market Effects of an Income Tax Reduction Targeted at Older Workers?. Economics Research International No. 2012 (2012), pp.1-12.
https://search.emarefa.net/detail/BIM-473409
American Medical Association (AMA)
Fougère, Maxime& Harvey, Simon& Rainville, Bruno. What Are the Economic and Labour Market Effects of an Income Tax Reduction Targeted at Older Workers?. Economics Research International. 2012. Vol. 2012, no. 2012, pp.1-12.
https://search.emarefa.net/detail/BIM-473409
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-473409