A General Equilibrium Model for Tax Policy Evaluation

Ballard, Charles L.; Fullerton, Don; Shoven, John B.; Whalley, John

doi:10.7208/chicago/9780226036335.001.0001

“…In particular, the duration of unemployment benefits depends on the unem- we proceed as follows: first, we assign SA payments to all voluntarily unemployed singles and to those couple households whose adult members are both voluntarily 34 unemployed 3 . Second, for positive hours of labour supply we distinguish three labour market states: a person who supplies a positive number of hours worked may be employed, which will be denoted as state (e).…”

Section: Discussionmentioning

confidence: 99%

“…The capitalist household receives all capital and profit income. Capitalists decide over consumption and investment according to the approach of Ballard et al (1985). Their utility function is calibrated to empirical saving elasticities (Bernheim 2001).…”

Section: Private Householdsmentioning

confidence: 99%

Discrete Working Time Choice in an Applied General Equilibrium Model

Boeters

¹

,

Feil

²

,

Gürtzgen

³

2005

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Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp0420.pdf The model is calibrated to German micro and macro data. We then use it to analyse stylised policy reforms that are designed to stimulate labour supply. In the first scenario, the basic social assistance (SA) rate ("Regelsatz") is cut by 50 per cent for all household members (adults and children). In the second scenario, individuals with large child care responsibilities, i.e. single parents with more than one child and women in couple households with more than one child, are exempted from the SA rate cut. In both cases, we report macroeconomic changes as well as effects on the participation rate, average working hours and labour supply for different subsets of Abstract We present a model that integrates the discrete working time choice of heterogenous households into a general equilibrium setting where wages are determined by sectoral bargaining between firms and trade unions. The model is calibrated to German micro and macro data. We then use it to analyse stylised policy reforms that are designed to stimulate labour supply.

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“…There are two principal alternatives: (1) in the Dutch MIMIC model (Graafland et al, 2001) household heterogeneity (within household types) results from an autonomous working time preference parameter, and (2) a conventional logit setup includes a stochastic idiosyncratic term in the formulation of household preferences for the individual working time options (van Soest 1995). In this paper we perform a detailed comparison and assessment of these two different approaches.…”

Section: Non-technical Summarymentioning

confidence: 99%

“…Working time enters utility in three ways: In the first part of the utility function it reduces leisure (the difference to total time endowment, T ) and is connected to consumption 1 , C, through the wage level and the rules of the tax and transfer 1 We use a static approach and assume that consumption equals income.…”

Section: The Autonomous Working Time Preference Approachmentioning

confidence: 99%

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Alternative approaches to discrete working time choice in an AGE framework

Arntz

¹

,

Boeters

²

,

Gürtzgen

³

2006

Economic Modelling

7

0

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Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp0562.pdf We contrast this with a model that directly incorporates a logit discrete-choice approach into a AGE framework. On the grounds of both calibration consistency and adequate accomodation of within-household interaction, we argue that the logit approach is preferable.

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The impact of the proposed reduction in the motor fuels excise tax in the United States

Uri

¹

,

Boyd

²

1997

Int. J. Energy Res.

0

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SUMMARYThe analysis in this paper examines the impact of reducing the excise tax on gasoline and diesel fuel on the United States economy. The analytical approach used in the analysis consists of a computable general equilibrium model composed of fourteen producing sectors, fourteen consuming sectors, six household categories classified by income and a government. The effects of a 4·3 cents per gallon reduction in the excise tax on gasoline and diesel fuel on prices and quantities are examined. The results suggest, for example, a decrease in the tax would result in higher output by the producing sectors (by about $2·86 billion), a expansion in the consumption of goods and services (by about $3·48 billion), and an increase in welfare (by about $3·59 billion). The government would realize a decrease in revenue of about $2·37 billion. When subjected to a sensitivity analysis, the results are reasonably robust with regard to the assumption of the values of the substitution elasticities.

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A General Equilibrium Model for Tax Policy Evaluation

Cited by 264 publications

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Discrete Working Time Choice in an Applied General Equilibrium Model

Discrete Working Time Choice in an Applied General Equilibrium Model

Alternative approaches to discrete working time choice in an AGE framework

The impact of the proposed reduction in the motor fuels excise tax in the United States

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