Public Policies over the Life Cycle: A Large Scale OLG Model for France, Italy and Sweden
54 Pages Posted: 23 Dec 2015
Date Written: December 14, 2015
The paper presents a large scale overlapping generation model with heterogeneous agents, where the family is the decision unit. We calibrate the model for three European countries – France, Italy and Sweden – which show marked differences in the design of some public programs. We examine the properties in terms of annual and lifetime redistribution of a number of tax-benefit programs, by studying the impact of removing from our model economies some or all of them. We find that whether one considers a life-cycle or an annual horizon, and whether behavioral responses are accounted for or not, has a large impact on the results. The model may provide useful insights for policy makers on which kind of reforms are more likely to achieve specific equity objectives.
Keywords: Redistribution, fiscal policy, computable OLG models
JEL Classification: H2, H3
Suggested Citation: Suggested Citation