GROWTH EFFECTS OF CONSUMPTION AND LABOR-INCOME TAXATION IN AN OVERLAPPING-GENERATIONS LIFE-CYCLE MODEL

We study labor-income and consumption taxation in an overlapping-generations model featuring endogenous growth due to interfirm investment externalities. Consumption, saving, and labor supply display life-cycle features because mortality and labor productivity are age-dependent and because annuity markets may be imperfect. The government's method of revenue recycling critically affects the growth consequences of taxation. Purely consumptive government spending has a negative impact on growth. Redistribution of tax revenue from dissavers to savers may lead to an increase in growth due to beneficial intergenerational transfer effects.

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ADULT LONGEVITY AND GROWTH TAKEOFF

Macroeconomic Dynamics ◽

10.1017/s1365100514000285 ◽

2014 ◽

Vol 20 (1) ◽

pp. 165-188 ◽

Cited By ~ 6

Author(s):

Daishin Yasui

Keyword(s):

Life Cycle ◽

Life Expectancy ◽

Early Retirement ◽

Overlapping Generations ◽

Working Life ◽

Adult Longevity ◽

Overlapping Generations Model ◽

Fertility Decisions ◽

Retirement Decisions ◽

Positive Effect

This paper develops an overlapping-generations model in which agents make educational and fertility decisions under life-cycle considerations and retirement from work is distinguished from death. Gains in adult longevity induce agents to decrease fertility, invest in education, and achieve higher income in order to save more for retirement. Even if working life is shortened by early retirement, this mechanism works as long as adult longevity increases sufficiently. Our model can explain the positive effect of life expectancy on education without contradicting the fact that working life length has not substantially increased, because of retirement. We also provide new insights into the interaction between fertility and retirement decisions.

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AGING, THE GREAT MODERATION, AND BUSINESS-CYCLE VOLATILITY IN A LIFE-CYCLE MODEL

Macroeconomic Dynamics ◽

10.1017/s136510051500053x ◽

2016 ◽

Vol 21 (2) ◽

pp. 362-383 ◽

Cited By ~ 4

Author(s):

Burkhard Heer ◽

Stefan Rohrbacher ◽

Christian Scharrer

Keyword(s):

Life Cycle ◽

Labor Supply ◽

Overlapping Generations ◽

Empirical Studies ◽

Output Volatility ◽

Great Moderation ◽

Overlapping Generations Model ◽

Age Composition ◽

The Impact ◽

Shaped Pattern

According to empirical studies, the life cycle of labor supply volatility exhibits a U-shaped pattern. This may lead to the conclusion that demographic change induces a drop in output volatility. We present an overlapping-generations model that replicates the empirically observed pattern and study the impact of demographic transition on output volatility. We find that the change in age composition itself has only a marginal influence on output volatility, as the mitigating effect of more individuals with lower labor supply volatilities is compensated for by higher age-specific labor shares. Instead, the driving force behind the Great Moderation in our model is the downward shift of the age-specific labor supply volatility curve.

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A Quantitative Analysis of Female Employment in Senegal

IMF Working Papers ◽

10.5089/9781513516202.001 ◽

2019 ◽

Vol 19 (241) ◽

Author(s):

Vivian Malta ◽

Angelica Martinez ◽

Marina Mendes Tavares

Keyword(s):

Labor Market ◽

Life Cycle ◽

Quantitative Analysis ◽

Overlapping Generations ◽

Female Employment ◽

Overlapping Generations Model ◽

Percentage Points ◽

Working Age ◽

Working Age Population ◽

The Impact

Female-to-male employment in Senegal increased by 14 percentage points between 2006 and 2011. During the same period years of education of the working age population increased 27 percent for females and 13 percent for males, reducing gender gaps in education. In this paper, we quantitatively investigate the impact of this increase in education on female employment in Senegal. To that end, we build an overlapping generations model that captures barriers that women face over their life-cycle. Our main findings are: (i) the improvement in years of education can explain up to 44 percent of the observed increased in female-to-male employment ratio and (ii) the rest can be explained by a decline in the discrimination against women in the labor market.

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THE IMPACT OF COAL RESOURCE TAX REFORM ON THE CHINESE ECONOMY: A CGE ANALYSIS

The Singapore Economic Review ◽

10.1142/s0217590817400161 ◽

2018 ◽

Vol 63 (03) ◽

pp. 555-565 ◽

Cited By ~ 2

Author(s):

YU LIU ◽

MEIFANG ZHOU

Keyword(s):

Tax Reform ◽

Negative Impact ◽

Chinese Economy ◽

Tax Revenue ◽

Consumption Tax ◽

Ad Valorem Tax ◽

Revenue Recycling ◽

Coal Resource ◽

The Impact ◽

Ad Valorem

China’s coal resource tax reform, introducing an ad valorem tax to replace previous volume-based tax from December 2014, marked a new stage of the resource pricing mechanism reform. In particular, coal, as a pollution-intensive energy, is the main source of energy for China. With this in mind, it is the time to ask what the impacts of this reform would be on Chinese economy. A computable general equilibrium (CGE) model is applied to explore the impact of a 5% ad valorem coal resource tax on Chinese economy under four scenarios involving distinguished electricity pricing mechanisms and tax revenue recycling scheme by deducting consumption tax. Simulation results show that levying ad valorem tax will reduce the output of energy-intensive industries with minor negative impact on economy. A consumption tax deduction can offset the negative impact on real GDP and help the economy to restructure. The concern that reform will push up inflation is unnecessary, even under the market price mechanism of electricity. In terms of winners, export-oriented industries benefit when no tax revenue recycling, while industries producing private consumption goods benefit when ad valorem coal resource tax revenue is used to deduct consumption tax.

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