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The future of taxation in changing labour markets
Article | Year: 2023 | Pages: 521 - 554 | Volume: 47 | Issue: 4 Received: September 11, 2023 | Accepted: October 18, 2023 | Published online: December 11, 2023
|
FULL ARTICLE
FIGURES & DATA
REFERENCES
CROSSMARK POLICY
METRICS
LICENCING
PDF
Source: Authors’ calculation using EUROSTAT data.
Source: Authors’ calculation using Cedefop COVID-19 scenario data.
Source: Authors’ calculation using Cedefop COVID-19 scenario data.
Source: Authors’ calculation using Cedefop COVID-19 scenario data.
Source: Economic Policy Committee (2020).
Source: Authors’ calculation using EUROMOD (version I2.0+).
Source: Authors’ calculation using EUROMOD (version I2.0+).
* Net positions for all countries (% 2019 GDP). Source: Authors’ calculation using EUROMOD (version I2.0+).
Source: Authors’ calculation using EUROMOD (version I2.0+).
Source: Authors’ calculation using EUROMOD (version I2.0+).
Source: Authors’ calculation using EUROMOD (version I2.0+).
Source: Authors’ calculation using EUROMOD (version I2.0+).
Source: Authors’ calculation using EUROMOD (version I2.0+).
Source: Authors’ calculation using EUROMOD (version I2.0+).
Source: Authors’ calculation using ESTAT data.
Source: Authors’ calculation using Cedefop data.
|
|
Age group
|
Year
|
|
Age group
|
Year
|
|
2019
|
2025
|
2030
|
2019
|
2025
|
2030
|
|
AT
|
<16
|
15.4
|
15.4
|
15.3
|
IE
|
<16
|
21.9
|
20.0
|
18.4
|
|
16-65
|
66.8
|
65.3
|
63.2
|
16-65
|
65.0
|
65.1
|
65.0
|
|
66+
|
17.8
|
19.3
|
21.5
|
66+
|
13.2
|
14.9
|
16.5
|
|
Pop (mil)
|
8.86
|
9.03
|
9.15
|
Pop (mil)
|
4.90
|
5.27
|
5.50
|
|
BE
|
<16
|
18.0
|
17.3
|
16.4
|
IT
|
<16
|
14.1
|
13.0
|
12.2
|
|
16-65
|
64.2
|
63.3
|
62.3
|
16-65
|
64.2
|
63.7
|
62.4
|
|
66+
|
17.8
|
19.5
|
21.3
|
66+
|
21.7
|
23.4
|
25.4
|
|
Pop (mil)
|
11.46
|
11.66
|
11.76
|
Pop (mil)
|
60.36
|
60.09
|
59.94
|
|
BG
|
<16
|
15.2
|
15.3
|
14.6
|
LT
|
<16
|
16.0
|
16.2
|
15.5
|
|
16-65
|
64.8
|
63.0
|
62.4
|
16-65
|
65.3
|
63.4
|
61.0
|
|
66+
|
20.0
|
21.7
|
23.0
|
66+
|
18.7
|
20.4
|
23.4
|
|
Pop (mil)
|
7.00
|
6.69
|
6.45
|
Pop (mil)
|
2.79
|
2.71
|
2.58
|
|
CY
|
<16
|
17.2
|
16.9
|
16.7
|
LU
|
<16
|
17.1
|
16.3
|
15.7
|
|
16-65
|
67.8
|
66.2
|
64.9
|
16-65
|
69.5
|
68.7
|
67.4
|
|
66+
|
15.1
|
16.9
|
18.5
|
66+
|
13.4
|
14.9
|
16.8
|
|
Pop (mil)
|
0.88
|
0.93
|
0.96
|
Pop (mil)
|
0.61
|
0.66
|
0.69
|
|
CZ
|
<16
|
16.8
|
16.9
|
16.3
|
LV
|
<16
|
16.9
|
16.6
|
16.0
|
|
16-65
|
64.9
|
63.0
|
62.9
|
16-65
|
64.0
|
62.3
|
60.5
|
|
66+
|
18.3
|
20.1
|
20.8
|
66+
|
19.1
|
21.1
|
23.5
|
|
Pop (mil)
|
10.65
|
10.79
|
10.76
|
Pop (mil)
|
1.92
|
1.82
|
1.71
|
|
DE
|
<16
|
14.5
|
15.1
|
15.3
|
MT
|
<16
|
14.5
|
14.6
|
14.2
|
|
16-65
|
65.1
|
63.2
|
60.9
|
16-65
|
67.9
|
66.7
|
65.8
|
|
66+
|
20.3
|
21.7
|
23.8
|
66+
|
17.5
|
18.8
|
19.9
|
|
Pop (mil)
|
83.02
|
83.48
|
83.45
|
Pop (mil)
|
0.49
|
0.56
|
0.59
|
|
DK
|
<16
|
17.7
|
17.2
|
17.3
|
NL
|
<16
|
17.0
|
16.3
|
16.1
|
|
16-65
|
63.9
|
62.6
|
61.2
|
16-65
|
65.0
|
63.6
|
61.7
|
|
66+
|
18.4
|
20.1
|
21.5
|
66+
|
18.0
|
20.1
|
22.1
|
|
Pop (mil)
|
5.81
|
5.88
|
5.96
|
Pop (mil)
|
17.28
|
17.75
|
17.97
|
|
EE
|
<16
|
17.4
|
16.6
|
15.5
|
PL
|
<16
|
16.3
|
15.7
|
14.5
|
|
16-65
|
64.1
|
63.0
|
62.6
|
16-65
|
67.4
|
64.6
|
63.9
|
|
66+
|
18.6
|
20.4
|
22.0
|
66+
|
16.3
|
19.7
|
21.6
|
|
Pop (mil)
|
1.32
|
1.32
|
1.31
|
Pop (mil)
|
37.97
|
37.57
|
37.02
|
|
EL
|
<16
|
15.3
|
14.4
|
13.4
|
PT
|
<16
|
14.7
|
14.0
|
13.7
|
|
16-65
|
63.8
|
62.9
|
62.1
|
16-65
|
64.6
|
63.3
|
61.5
|
|
66+
|
20.9
|
22.7
|
24.5
|
66+
|
20.6
|
22.7
|
24.8
|
|
Pop (mil)
|
10.72
|
10.51
|
10.30
|
Pop (mil)
|
10.28
|
10.22
|
10.09
|
|
ES
|
<16
|
15.8
|
14.3
|
13.2
|
RO
|
<16
|
16.7
|
16.0
|
15.3
|
|
16-65
|
65.9
|
65.6
|
64.4
|
16-65
|
66.0
|
64.2
|
64.0
|
|
66+
|
18.3
|
20.1
|
22.4
|
66+
|
17.3
|
19.9
|
20.8
|
|
Pop (mil)
|
46.94
|
48.31
|
48.75
|
Pop (mil)
|
19.41
|
18.51
|
17.81
|
|
FI
|
<16
|
17.1
|
15.6
|
14.3
|
SE
|
<16
|
18.9
|
18.6
|
18.0
|
|
16-65
|
62.4
|
61.5
|
61.2
|
16-65
|
62.3
|
61.8
|
61.9
|
|
66+
|
20.5
|
22.9
|
24.5
|
66+
|
18.8
|
19.5
|
20.1
|
|
Pop (mil)
|
5.52
|
5.54
|
5.52
|
Pop (mil)
|
10.23
|
10.75
|
11.10
|
|
FR
|
<16
|
19.2
|
18.4
|
17.6
|
SI
|
<16
|
15.9
|
15.5
|
14.3
|
|
16-65
|
61.9
|
60.7
|
59.8
|
16-65
|
65.6
|
63.5
|
62.6
|
|
66+
|
18.9
|
20.9
|
22.6
|
66+
|
18.5
|
21.0
|
23.1
|
|
Pop (mil)
|
67.01
|
68.04
|
68.75
|
Pop (mil)
|
2.08
|
2.11
|
2.11
|
|
HR
|
<16
|
15.4
|
14.7
|
14.1
|
SK
|
<16
|
16.7
|
16.8
|
16.0
|
|
16-65
|
65.4
|
63.5
|
62.2
|
16-65
|
68.5
|
65.5
|
64.3
|
|
66+
|
19.2
|
21.8
|
23.7
|
66+
|
14.8
|
17.8
|
19.7
|
|
Pop (mil)
|
4.08
|
3.94
|
3.83
|
Pop (mil)
|
5.45
|
5.47
|
5.44
|
|
HU
|
<16
|
15.5
|
15.3
|
15.3
|
EU
|
<16
|
16.2
|
15.6
|
15.1
|
|
16-65
|
66.6
|
64.5
|
64.2
|
16-65
|
64.7
|
63.4
|
62.1
|
|
66+
|
17.9
|
20.1
|
20.5
|
66+
|
19.1
|
21.0
|
22.8
|
|
Pop (mil)
|
9.77
|
9.70
|
9.62
|
Pop (mil)
|
446.82
|
449.30
|
449.12
|
|
|
Skill group
|
Year
|
|
Skill group
|
Year
|
|
2019
|
2025
|
2030
|
2019
|
2025
|
2030
|
|
AT
|
High
|
41.2
|
42.2
|
43.4
|
IE
|
High
|
41.6
|
43.0
|
43.7
|
|
Medium
|
50.5
|
49.2
|
47.8
|
Medium
|
50.0
|
48.6
|
47.8
|
|
Low
|
8.3
|
8.5
|
8.8
|
Low
|
8.4
|
8.4
|
8.5
|
|
Total jobs
(mil)
|
4.45
|
4.61
|
4.81
|
Total jobs
(mil)
|
2.21
|
2.32
|
2.56
|
|
BE
|
High
|
47.3
|
48.7
|
49.7
|
IT
|
High
|
36.6
|
39.0
|
41.0
|
|
Medium
|
42.1
|
40.7
|
39.8
|
Medium
|
51.9
|
50.2
|
48.7
|
|
Low
|
10.6
|
10.6
|
10.5
|
Low
|
11.5
|
10.8
|
10.2
|
|
Total jobs
(mil)
|
4.83
|
4.97
|
5.15
|
Total jobs
(mil)
|
25.32
|
25.17
|
25.66
|
|
BG
|
High
|
28.9
|
31.4
|
32.8
|
LT
|
High
|
41.8
|
44.3
|
45.6
|
|
Medium
|
58.7
|
56.0
|
54.4
|
Medium
|
49.0
|
47.1
|
46.1
|
|
Low
|
12.4
|
12.6
|
12.8
|
Low
|
9.1
|
8.6
|
8.3
|
|
Total jobs
(mil)
|
3.54
|
3.17
|
3.02
|
Total jobs
(mil)
|
1.35
|
1.29
|
1.25
|
|
CY
|
High
|
35.0
|
37.2
|
38.7
|
LU
|
High
|
54.6
|
58.0
|
59.9
|
|
Medium
|
49.1
|
47.1
|
46.0
|
Medium
|
35.5
|
33.3
|
32.0
|
|
Low
|
15.8
|
15.7
|
15.3
|
Low
|
9.9
|
8.7
|
8.1
|
|
Total jobs
(mil)
|
0.42
|
0.46
|
0.51
|
Total jobs
(mil)
|
0.44
|
0.47
|
0.52
|
|
CZ
|
High
|
38.2
|
40.3
|
42.0
|
LV
|
High
|
42.2
|
44.9
|
46.4
|
|
Medium
|
56.6
|
54.9
|
53.5
|
Medium
|
44.8
|
42.9
|
41.8
|
|
Low
|
5.1
|
4.8
|
4.5
|
Low
|
13.0
|
12.1
|
11.8
|
|
Total jobs
(mil)
|
5.37
|
5.26
|
5.26
|
Total jobs
(mil)
|
0.89
|
0.86
|
0.87
|
|
DE
|
High
|
44.7
|
45.5
|
45.9
|
MT
|
High
|
44.2
|
45.6
|
46.3
|
|
Medium
|
47.2
|
46.5
|
46.0
|
Medium
|
46.7
|
45.6
|
45.2
|
|
Low
|
8.1
|
8.1
|
8.1
|
Low
|
9.2
|
8.7
|
8.5
|
|
Total jobs
(mil)
|
44.07
|
44.25
|
45.41
|
Total jobs
(mil)
|
0.23
|
0.23
|
0.24
|
|
DK
|
High
|
47.7
|
50.2
|
52.4
|
NL
|
High
|
47.9
|
49.0
|
49.8
|
|
Medium
|
41.7
|
39.7
|
37.9
|
Medium
|
43.0
|
42.1
|
41.4
|
|
Low
|
10.6
|
10.1
|
9.7
|
Low
|
9.0
|
8.9
|
8.8
|
|
Total jobs
(mil)
|
2.95
|
3.03
|
3.14
|
Total jobs
(mil)
|
9.18
|
9.22
|
9.37
|
|
EE
|
High
|
46.3
|
48.3
|
49.9
|
PL
|
High
|
39.4
|
42.5
|
44.6
|
|
Medium
|
44.6
|
42.6
|
41.1
|
Medium
|
52.8
|
49.6
|
47.4
|
|
Low
|
9.0
|
9.1
|
9.0
|
Low
|
7.7
|
7.9
|
8.0
|
|
Total jobs
(mil)
|
0.64
|
0.62
|
0.62
|
Total jobs
(mil)
|
16.37
|
15.61
|
15.51
|
|
EL
|
High
|
29.5
|
31.6
|
32.6
|
PT
|
High
|
34.8
|
36.0
|
37.1
|
|
Medium
|
62.6
|
60.6
|
59.8
|
Medium
|
54.2
|
52.6
|
51.4
|
|
Low
|
7.9
|
7.8
|
7.6
|
Low
|
11.1
|
11.4
|
11.5
|
|
Total jobs
(mil)
|
4.22
|
4.27
|
4.47
|
Total jobs
(mil)
|
4.88
|
5.03
|
5.27
|
|
ES
|
High
|
34.3
|
36.0
|
37.1
|
RO
|
High
|
23.9
|
26.7
|
28.4
|
|
Medium
|
52.1
|
51.1
|
50.4
|
Medium
|
66.6
|
64.0
|
62.3
|
|
Low
|
13.6
|
12.9
|
12.5
|
Low
|
9.4
|
9.3
|
9.3
|
|
Total jobs
(mil)
|
19.87
|
19.65
|
20.20
|
Total jobs
(mil)
|
8.72
|
8.52
|
9.22
|
|
FI
|
High
|
46.0
|
46.6
|
47.1
|
SE
|
High
|
51.5
|
53.7
|
55.0
|
|
Medium
|
47.4
|
46.5
|
45.6
|
Medium
|
43.6
|
41.7
|
40.5
|
|
Low
|
6.5
|
6.9
|
7.4
|
Low
|
4.9
|
4.6
|
4.5
|
|
Total jobs
(mil)
|
2.59
|
2.61
|
2.70
|
Total jobs
(mil)
|
4.97
|
5.06
|
5.30
|
|
FR
|
High
|
45.8
|
47.2
|
48.3
|
SI
|
High
|
46.5
|
49.4
|
51.3
|
|
Medium
|
43.5
|
41.4
|
39.8
|
Medium
|
43.6
|
39.9
|
37.2
|
|
Low
|
10.8
|
11.4
|
11.8
|
Low
|
9.9
|
10.7
|
11.4
|
|
Total jobs
(mil)
|
28.21
|
27.65
|
28.72
|
Total jobs
(mil)
|
1.00
|
1.00
|
1.05
|
|
HR
|
High
|
38.0
|
40.4
|
41.6
|
SK
|
High
|
33.2
|
34.4
|
34.9
|
|
Medium
|
54.5
|
52.2
|
50.9
|
Medium
|
58.1
|
56.8
|
56.1
|
|
Low
|
7.5
|
7.4
|
7.5
|
Low
|
8.8
|
8.8
|
9.0
|
|
Total jobs
(mil)
|
1.64
|
1.58
|
1.64
|
Total jobs
(mil)
|
2.40
|
2.44
|
2.56
|
|
HU
|
High
|
36.1
|
38.5
|
40.2
|
EU
|
High
|
40.5
|
42.2
|
43.4
|
|
Medium
|
53.2
|
50.4
|
48.3
|
Medium
|
49.9
|
48.2
|
47.0
|
|
Low
|
10.7
|
11.1
|
11.5
|
Low
|
9.7
|
9.6
|
9.6
|
|
Total jobs
(mil)
|
4.58
|
4.57
|
4.68
|
Total jobs
(mil)
|
205.31
|
203.92
|
209.73
|
Figure 1Population projections by age groups in the EU-27, 2019-2030 DISPLAY Figure
Figure 2Employment and unemployment projections in the EU-27, 2019-2030 DISPLAY Figure
Figure 3Skills forecast projections in the EU-27, 2019-2030 DISPLAY Figure
Figure 4Skill evolution index across EU member states, 2019-2030 (2019 = 100) DISPLAY Figure
Figure 5Pension expenditure projections across EU member states, 2019-2030 (% of GDP) DISPLAY Figure
Figure 6Changes in fiscal aggregates in the EU-27, 2019-2030 DISPLAY Figure
Figure 7Changes in fiscal aggregates in the EU-27, working age individuals, 2019-2030 DISPLAY Figure
Figure 8Fiscal evolution index across EU member states, 2019-2030 (2019 = 100)* DISPLAY Figure
Figure 9Net positions of governments with respect to households, 2019-2030 (% 2019 GDP) DISPLAY Figure
Figure 10At-risk-of-poverty (AROP) rates and Gini coefficients in the EU-27, 2019-2030 DISPLAY Figure
Figure 11At-risk-of-poverty (AROP) rate across member states, 2019-2030 (%) DISPLAY Figure
Figure 12Gini coefficients across EU member states, 2019-2030 DISPLAY Figure
Figure 13Poverty reduction index across EU member states, 2019-2030 (p.p.) DISPLAY Figure
Figure 14Redistribution index across EU member states, 2019-2030 DISPLAY Figure
Figure A1Demographic projections across EU member states, 2019-2030 (2019 = 100) DISPLAY Figure
Figure A2Employment rate (right hand scale) and unamployment rate (left hand scale) projections (in %) accross EU member states, 2019-2030 DISPLAY Figure
Table A1Population projections, years 2019-2030 (in %) DISPLAY Table
Table A2Skill and total jobs projections, years 2019-2030 (in %) DISPLAY Table
* The content of this article does not reflect the official opinion of the European Commission. Responsibility for the information and views expressed in the article lies entirely with the author(s).
We are indebted to the many people who have helped to improve the paper substantially. A special thanks goes to Salvador Barrios (DG JRC), Ana Agúndez (DG JRC), Jörg Peschner (DG TAXUD) and Giovanni Russo (Cedefop), as well as to two reviewers for their helpful comments and advice. Additionally, we want to thank the participants of the 3rd JRC Fiscal Policy Workshop in 2021, the colleagues at JRC B2 unit, as well as the participants of the Cedefop Department for VET and Skills research seminar for helpful comments.
1 See Economic Policy Committee (  2020).
2 Note that the projections used do not consider a more rapid adoption of technology because of COVID-19.
3 Intuitively, Dolls et al. (2019) estimate a relationship between education, population ageing and wages. Projecting changes in ageing and education, they predict changes in wages. We keep wage skill premiums constant, but we modify the number of people in each age category, the proportion of workers and the skill composition such that we replicate the trends seen in the projections.
4 EUROMOD is used to simulate the impact certain changes in the tax-benefit system may have on individuals’ income. In its standard version, the model does not take into account behavioural changes that may follow these changes, thus it delivers “morning after” effects. However, it can be linked to other models for behavioural analysis and general equilibrium effects.
5 EU-SILC User Data Base(UDB) data, distributed by ESTAT, have been complemented with information from national SILC data in Austria, Czechia, Estonia, Greece, Italy, Lithuania, Luxembourg, Poland and Slovakia.
6 Taxes and benefits that cannot be simulated because of lack of relevant information in the data are used as recorded in EU-SILC.
8 Forecasts are based on harmonized data and a single methodology (see Cedefop, 2012) to obtain comparable results across countries.
9 Please note that jobs in the armed forces are counted in the total number of jobs, but not in the skill classification.
10 See Economic Policy Committee ( 2020).
11 `Nowcasting’ means the forecasting of variables or indicators in current or recent times or in the very near future, as opposed to survey data which are usually available with a time lag.
12 Data on population in 2023 and employment in 2022 were both retrieved in October 2023 from EUROSTAT database, online data codes tps00001 and lfsi_emp_a__custom_7829993.
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December, 2023
IV/2023
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