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Labour Taxation and Inclusive Growth

Author

Listed:
  • Athena Kalyva
  • Savina Prince
  • Alexander Leodolter
  • Caterina Astarita

Abstract

The importance of tackling income inequality has been stressed in the context of the European Pillar of Social Rights. In this context, the 2018 Annual Growth Survey underlined the relevance of labour taxes to pursue inclusive growth, as it has an important impact on economic growth but also on income inequality. Not all labour tax reforms, however, can simultaneously foster growth and reduce income inequality: some reforms imply a trade-off while others offer a win-win situation. This paper focusses on those labour tax reforms which offer complementarities between growth and income inequality objectives. It expands on work carried out for the Eurogroup (tax wedge, financing labour tax cuts) and the Economic Policy Committee (secondary earners, design of labour taxation) in supporting the EU political imperative of addressing income inequalities while fostering growth.

Suggested Citation

  • Athena Kalyva & Savina Prince & Alexander Leodolter & Caterina Astarita, 2018. "Labour Taxation and Inclusive Growth," European Economy - Discussion Papers 084, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:dispap:084
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    Citations

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    Cited by:

    1. Kovács, Olivér, 2020. "Gazellák az iparpolitika tükrében, II [Gazelles and industrial policy, Part II]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 181-205.
    2. Kelly, Stephanie & Watt, Abigail & Lawson, Jeremy & Hardie, Nancy, 2021. "Disentangling the drivers of labour force participation by sex - a cross country study," CEPR Discussion Papers 15661, C.E.P.R. Discussion Papers.
    3. Madalina Ecaterina Popescu & Eva Militaru & Larisa Stanila & Maria Denisa Vasilescu & Amalia Cristescu, 2019. "Flat-Rate versus Progressive Taxation? An Impact Evaluation Study for the Case of Romania," Sustainability, MDPI, vol. 11(22), pages 1-16, November.
    4. Opeoluwa Adeniyi Adeosun & Olumide S. Ayodele & Mosab I. Tabash & Suhaib Anagreh, 2023. "Resource mobilisation, institution and inclusive growth in Africa: Evidence from spatial analysis," South African Journal of Economics, Economic Society of South Africa, vol. 91(1), pages 28-67, March.
    5. D'ANDRIA Diego & DEBACKER Jason & EVANS Richard W. & PYCROFT Jonathan & ZACHLOD-JELEC Magdalena, 2021. "Taxing income or consumption: macroeconomic and distributional effects for Italy," JRC Working Papers on Taxation & Structural Reforms 2021-13, Joint Research Centre.

    More about this item

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D2 - Microeconomics - - Production and Organizations
    • D3 - Microeconomics - - Distribution
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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