IDEAS home Printed from https://ideas.repec.org/p/ipt/taxref/202115.html
   My bibliography  Save this paper

EUROLAB: A Multidimensional Labour Supply-Demand Model for EU countries

Author

Listed:

Abstract

This paper describes EUROLAB, a labour supply-demand microsimulation model that relies on EUROMOD, the static microsimulation model for the European Union countries. EUROLAB is built on a multidimensional discrete choice model of labour supply and accounts for involuntary unemployment. The model estimates individual changes in supplied hours of work and participation as a reaction to a hypothetical or real tax transfer reform, often referred to in the literature as “second-order” effects. Furthermore, the model allows for the demand-side effects of a labour market that, depending on how elastic it is, would lead to a different labour supply when the market reaches its equilibrium. The model is unique in covering 27 countries under the same specification of preferences, opportunity set representation and the same concept of income and working hours. We illustrate the usefulness of the model by showing several examples of EUROLAB, using both the one-dimensional and multidimensional versions. Potential extensions of the model are also discussed in the paper.

Suggested Citation

  • NARAZANI Edlira & COLOMBINO Ugo & PALMA FERNANDEZ Bianey, 2021. "EUROLAB: A Multidimensional Labour Supply-Demand Model for EU countries," JRC Working Papers on Taxation & Structural Reforms 2021-15, Joint Research Centre.
    • Handle: RePEc:ipt:taxref:202115
    as

    Download full text from publisher

    File URL: https://publications.jrc.ec.europa.eu/repository/handle/JRC127383
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Figari, Francesco & Colombino, Ugo & Coda Moscarola, Flavia & Locatelli, Marilena, 2014. "Shifting taxes from labour to property. A simulation under labour market equilibrium," EUROMOD Working Papers EM20/14, EUROMOD at the Institute for Social and Economic Research.
    2. Ericson, Peter & Flood, Lennart & Wahlberg, Roger, 2009. "SWEtaxben: A Swedish Tax/benefit Micro Simulation Model and an Evaluation of a Swedish Tax Reform," Working Papers in Economics 346, University of Gothenburg, Department of Economics.
    3. Steinar StrØm & John K. Dagsvik, 2006. "Sectoral labour supply, choice restrictions and functional form," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(6), pages 803-826.
    4. Michael Christl & Silvia De Poli & Janos Varga, 2022. "Reducing the income tax burden for households with children: an assessment of the child tax credit reform in Austria," Fiscal Studies, John Wiley & Sons, vol. 43(2), pages 151-177, June.
    5. François Bourguignon & Martin Fournier & Marc Gurgand, 2007. "Selection Bias Corrections Based On The Multinomial Logit Model: Monte Carlo Comparisons," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 174-205, February.
    6. Vanda Almeida & Salvador Barrios & Michael Christl & Silvia Poli & Alberto Tumino & Wouter Wielen, 2021. "The impact of COVID-19 on households´ income in the EU," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(3), pages 413-431, September.
    7. John Creedy & Alan S. Duncan & Mark Harris & Rosanna Scutella, 2002. "Microsimulation Modelling of Taxation and the Labour Market," Books, Edward Elgar Publishing, number 2796, December.
    8. John Creedy & Alan Duncan, 2005. "Aggregating Labour Supply and Feedback Effects in Microsimulation," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 8(3), pages 277-290, September.
    9. Aaberge, Rolf & Colombino, Ugo & Strom, Steinar, 1999. "Labour Supply in Italy: An Empirical Analysis of Joint Household Decisions, with Taxes and Quantity Constraints," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(4), pages 403-422, July-Aug..
    10. Blundell, Richard & MaCurdy, Thomas & Meghir, Costas, 2007. "Labor Supply Models: Unobserved Heterogeneity, Nonparticipation and Dynamics," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 69, Elsevier.
    11. Tito Boeri & Giulia Giupponi & Alan B. Krueger & Stephen Machin, 2020. "Solo Self-Employment and Alternative Work Arrangements: A Cross-Country Perspective on the Changing Composition of Jobs," Journal of Economic Perspectives, American Economic Association, vol. 34(1), pages 170-195, Winter.
    12. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-362, March.
    13. Ugo Colombine, 2013. "A new equilibrium simulation procedure with discrete choice models," International Journal of Microsimulation, International Microsimulation Association, vol. 6(3), pages 25-49.
    14. Colombino Ugo & Locatelli Marilena & Narazani Edlira & O'Donoghue Cathal, 2010. "Alternative Basic Income Mechanisms: An Evaluation Exercise With a Microeconometric Model," Basic Income Studies, De Gruyter, vol. 5(1), pages 1-31, September.
    15. Michael Christl & Silvia Poli, 2021. "Trapped in inactivity? Social assistance and labour supply in Austria," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(3), pages 661-696, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Andreas THIEMANN & Diana OGNYANOVA & Edlira NARAZANI & Balazs PALVOLGYI & Athena Kalyva & Alexander LEODOLTER, 2021. "Shifting the Tax Burden away from Labour towards Inheritances and Gifts – Simulation results for Germany," JRC Working Papers on Taxation & Structural Reforms 2021-16, Joint Research Centre.
    2. repec:ptu:bdpart:e202212 is not listed on IDEAS
    3. Lara Wemans & Sara Riscado & Edlira Narazani, 2022. "The role of family social transfers in reducing child poverty in Portugal," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. NARAZANI Edlira & COLOMBINO Ugo, 2021. "Modelling sector-specific employment shocks with EUROLAB, a multidimensional behavioural model," JRC Working Papers on Taxation & Structural Reforms 2021-09, Joint Research Centre.
    2. Mauro Mastrogiacomo & Nicole M. Bosch & Miriam D. A. C. Gielen & Egbert L. W. Jongen, 2017. "Heterogeneity in Labour Supply Responses: Evidence from a Major Tax Reform," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(5), pages 769-796, October.
    3. Coda Moscarola, Flavia & Colombino, Ugo & Figari, Francesco & Locatelli, Marilena, 2020. "Shifting taxes away from labour enhances equity and fiscal efficiency," Journal of Policy Modeling, Elsevier, vol. 42(2), pages 367-384.
    4. Rolf Aaberge & Ugo Colombino, 2014. "Labour Supply Models," Contributions to Economic Analysis, in: Handbook of Microsimulation Modelling, volume 127, pages 167-221, Emerald Group Publishing Limited.
    5. Colombino, Ugo & Narazani, Edlira, 2014. "Closing the Gender Gap: Gender Based Taxation, Wage Subsidies or Basic Income?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201412, University of Turin.
    6. Islam, Nizamul & Colombino, Ugo, 2018. "The case for NIT+FT in Europe. An empirical optimal taxation exercise," Economic Modelling, Elsevier, vol. 75(C), pages 38-69.
    7. Figari, Francesco & Colombino, Ugo & Coda Moscarola, Flavia & Locatelli, Marilena, 2014. "Shifting taxes from labour to property. A simulation under labour market equilibrium," EUROMOD Working Papers EM20/14, EUROMOD at the Institute for Social and Economic Research.
    8. Rolf Aaberge & Ugo Colombino, 2018. "Structural Labour Supply Models and Microsimulation," International Journal of Microsimulation, International Microsimulation Association, vol. 11(1), pages 162-197.
    9. Colombino, Ugo, 2010. "Equilibrium Policy Simulations with Random Utility Models of Labour Supply," IZA Discussion Papers 5262, Institute of Labor Economics (IZA).
    10. Colombino, Ugo, 2012. "Equilibrium Simulation with Microeconometric Models: A New Procedure with an Application to Income Support Policies," IZA Discussion Papers 6679, Institute of Labor Economics (IZA).
    11. Ugo Colombino & Nizamul Islam, 2022. "The “Robot Economy†and optimal tax-transfer reforms," CHILD Working Papers Series 101 JEL Classification: H, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    12. Ugo Colombino & Nizamul Islam, 2021. "Global and digitalised economy, new labour demand scenarios and optimal tax-transfer reforms," CHILD Working Papers Series 90 JEL Classification: H2, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    13. Ugo Colombino, 2011. "Five issues in the design of income support mechanisms. The case of Italy," CHILD Working Papers wp21_11, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    14. Ugo Colombine, 2013. "A new equilibrium simulation procedure with discrete choice models," International Journal of Microsimulation, International Microsimulation Association, vol. 6(3), pages 25-49.
    15. Colombino, Ugo & Islam, Nizamul, 2022. "The "Robot Economy" and Optimal Tax-Transfer Reforms," IZA Discussion Papers 15198, Institute of Labor Economics (IZA).
    16. Bart Capéau & André Decoster & Stijn Van Houtven, 2024. "Piecemeal Modeling of the Effects of Joint Direct and Indirect Tax Reforms," Public Finance Review, , vol. 52(1), pages 111-149, January.
    17. Colombino Ugo & Narazani Edlira, 2013. "Designing a Universal Income Support Mechanism for Italy: An Exploratory Tour," Basic Income Studies, De Gruyter, vol. 8(1), pages 1-17, July.
    18. Colombino, Ugo & Islam, Nizamul, 2020. "Optimal Tax-Transfer Rules under Equilibrium and New Labour Demand Scenarios," IZA Discussion Papers 13541, Institute of Labor Economics (IZA).
    19. Narazani, Edlira & Agúndez García, Ana & Christl, Michael & Figari, Francesco, 2023. "The impact of alternative childcare policies on mothers' employment in selected EU countries," GLO Discussion Paper Series 1234, Global Labor Organization (GLO).
    20. Ugo Colombino, 2015. "Five Crossroads on the Way to Basic Income. An Italian Tour," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 1(3), pages 353-389, November.

    More about this item

    Keywords

    Behavioural Models; Discrete Choice Modelling; Labour supply; Labour market equilibrium;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ipt:taxref:202115. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Publication Officer (email available below). General contact details of provider: https://edirc.repec.org/data/ipjrces.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.