Employment, redistribution and optimal income taxation
This line of research is devoted to the questions:
- How to redistribute income in current economies characterized by the presence of unemployment, endogenous wages and decisions to participate or not to the (formal) labor market ? The aim is to characterize the tax function that optimizes a given social welfare criterion. An important channel is the impact of the tax schedule on wages and hence on labor demand. This impact is studied from theoretical and empirical perspectives.
- How to design unemployment insurance schemes.
Explanations of unemployment
Concerning the rise and the persistence of unemployment, the following research themes are or have been developed:
- Wage formation in Belgium.
- The role of unemployment insurance and the monitoring of the behavior of the unemployed.
- Analysis of the mechanisms by which geographical disparities in employment and income may arise and persist over time. Description of the project.
- The decentralization of labor market policies, rules and institutions in Belgium.
- The interaction between the functioning of the product markets and the one of the labor market.
- The impact of demographic shocks on unemployment and employment in the (in)formal economy.
- The role of deskilling (occupational or skill downgrading) during an unemployment spell.
Microeconometric evaluation of labor market policies
Current and past projects deal with
- The impact of monitoring and counseling programs for the unemployed.
- The impact of hiring subsidies, wage subsidies and training schemes for the unemployed.
- The evaluation of labor market policies that intend to keep ''old workers'' employed.
Macroeconomic and General-Equilibrium evaluation of labor market policies and structural changes
Earlier research focussed on marcoeconometric evaluation of labor market policies (See e.g. Dor et al, Oxford Bulletin of Economics and Statistics, 1997, and Van der Linden and Dor, 2000). More recently (calibrated) general equilibrium models with frictions have been used to evaluate the role of labor market policies such as the profile of unemployment benefits, training programs for the unemployed and reductions in social security contributions (Van der Linden, 2002, 2003a,2003b,2003c, 2005, the IZA discussion paper 2073 and the paper published with Gabriele Cardullo in 2007).
More recent work deals with the general equilibrium effects of the Internet and of place-based policies (like enterprise zones).
