abstract: 'Raising employment, in particular employment among older individuals and

  low educated individuals, stands high on the agenda of policy makers in

  many OECD countries. Increased sensitivity in recent years to rising

  inequality has made the challenge only larger. In this paper we evaluate

  alternative fiscal policy scenarios to face this challenge. We construct

  and use an overlapping generations model for an open economy where

  individuals differ not only by age, but also by innate ability and human

  capital. The model allows us to study effects on aggregate employment,

  per capita income and welfare, as well as effects for specific age and

  ability groups. We show that well-considered fiscal policy changes can

  significantly improve macroeconomic productive efficiency, without

  increasing intergenerational or intragenerational welfare inequality.

  Our results strongly prefer a reduction in the labor tax rate on older

  workers and on all low-wage earners, financed by an overall reduction in

  non-employment benefits. An alternative financing option is to raise the

  consumption tax rate. These results are to be seen as long-run effects

  for economies at potential output. (C) 2019 The Society for Policy

  Modeling. Published by Elsevier Inc. All rights reserved.'
affiliation: 'Heylen, F (Corresponding Author), Univ Ghent, Dept Econ, Sint Pieterspl
  6, B-9000 Ghent, Belgium.

  Heylen, Freddy; Van de Kerckhove, Renaat, Univ Ghent, Dept Econ, Sint Pieterspl
  6, B-9000 Ghent, Belgium.'
author: Heylen, Freddy and Van de Kerckhove, Renaat
author-email: 'Freddy.Heylen@UGent.be

  Renaat.VandeKerckhove@UGent.be'
author_list:
- family: Heylen
  given: Freddy
- family: Van de Kerckhove
  given: Renaat
da: '2023-09-28'
doi: 10.1016/j.jpolmod.2019.02.001
eissn: 1873-8060
files: []
issn: 0161-8938
journal: JOURNAL OF POLICY MODELING
keywords: 'Employment by age; Fiscal policy; Heterogeneous ability; Welfare

  inequality; Overlapping generations (OLG)'
keywords-plus: 'CROSS-COUNTRY DIFFERENCES; PENSION REFORM; LABOR; UNEMPLOYMENT;

  TAXATION; GROWTH; TAXES; MODEL'
language: English
month: JUL-AUG
number: '4'
number-of-cited-references: '26'
pages: 586-606
papis_id: db18f58590bbc0be83c66c5cf3cba574
ref: Heylen2019gettinglow
times-cited: '3'
title: 'Getting low educated and older people into work: The role of fiscal policy'
type: article
unique-id: WOS:000474682700003
usage-count-last-180-days: '2'
usage-count-since-2013: '13'
volume: '41'
web-of-science-categories: Economics
year: '2019'