Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/280861 
Year of Publication: 
2022
Series/Report no.: 
JRC Working Papers on Taxation and Structural Reforms No. 02/2022
Publisher: 
European Commission, Joint Research Centre (JRC), Seville
Abstract: 
This paper provides a first assessment of the fiscal and distributional consequences of the ongoing structural changes in the labour markets of EU Member States, mostly driven by technological progress and ageing. Cedefop 2020 Skill forecasts, EUROSTAT population projections and the forecast on pension expenditures from the 2021 Ageing Report depict a scenario of an ageing population, an inverted U-shaped unemployment trend and potentially polarising labour markets, the latter mostly driven by a surge in high-skill occupations. This analysis makes use of the microsimulation model EUROMOD and reweighting techniques to analyse the fiscal and distributional impacts of these trends, given the current tax-benefit policies. The results suggest that the macro trends will increase pressure on government budgets. The analysis also shows evidence of the capacity of the current tax-benefit systems to counterbalance the increases in income inequality and poverty risks triggered by the expected future labour markets developments.
Subjects: 
income distribution
budget
deficit
job polarisation
population ageing
JEL: 
J11
J21
H68
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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