Labour Market Adjustments and Macroeconomic Performance
(2006) Growth and Cohesion in the European Union: the Impact of Economic Policy — ISBN: [1-84542-611-8], p. 206-238, published
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- 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 nontargeted 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.
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Batyra, A., & Sneessens, H. (2006). Labour Market Adjustments and Macroeconomic Performance. In Mitchell, W. (ed.), Growth and Cohesion in the European Union: the Impact of Economic Policy (p. p. 206-238). Edward Elgar. https://hdl.handle.net/2078.5/149039