http://repub.eur.nl/res/aut/8739/ List of Publications en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/39748/ 2012-04-01T00:00:00Z Whether or not capitalism is compatible with ethics is a long standing dispute. We take up an approach to virtue ethics inspired by Adam Smith and consider how market competition influences the virtues most associated with modern commercial society. Up to a point, competition nurtures and supports such virtues as prudence, temperance, civility, industriousness and honesty. But there are also various mechanisms by which competition can have deleterious effects on the institutions and incentives necessary for sustaining even these most commercially friendly of virtues. It is often supposed that if competitive markets are good, more competition must always be better. However, in the long run competition enhancing policies that neglect the nurturing and support of the bourgeois virtues may undermine the continued flourishing of modern commercial society. http://repub.eur.nl/res/pub/1952/ 2000-01-01T00:00:00Z This paper develops an applied general equilibrium model to explore various tax cuts aimed at combating unemployment and raising labor supply. The model calibrates modern labor-market theories on wage setting, job matching, labor supply and labor demand on Dutch data. It represents the core of a larger applied general equilibrium model for the Netherlands called MIMIC. Simulations reveal that targeting in-work benefits at the low skilled is the most effective way to cut economy-wide unemployment. However, targeting is likely to damage the quality and quantity of labor supply. Tax cuts in the higher tax brackets boost the quantity and quality of formal labor supply but are less effective in reducing unemployment and in raising unskilled employment and female labor supply. http://repub.eur.nl/res/pub/1954/ 2000-01-01T00:00:00Z In recent policy discussions in the Netherlands, the Earned Income Tax Credit (EITC) has been put forward as an instrument to reduce the unemployment rate among low-skilled workers. Using MIMIC, CPB’s applied general equilibrium model for the Netherlands, this article discusses the economic impact of different forms of the EITC. The analysis reveals that moderately targeting the EITC to the unskilled makes the instrument more effective in reducing unemployment. The targeting concept features decreasing returns, however. Indeed, it may be counterproductive if the EITC is targeted at a very small income range. Furthermore, targeting the EITC to the low skilled induces adverse effects on the quality and quantity of labour supply because it raises the marginal tax burden on medium-income workers. http://repub.eur.nl/res/pub/1951/ 1999-01-01T00:00:00Z This paper analyses the impact of fiscal policy on the labour market by using an applied general equilibrium model for The Netherlands, called MIMIC. In particular, we explore the economic effects of changes in the tax system that currently receive much attention in the Dutch policy debate including, lower marginal tax rates, reductions in social premiums paid by employers targeted at the unskilled, vouchers for long-term unemployed, and earned income tax credits. http://repub.eur.nl/res/pub/11893/ 1998-01-01T00:00:00Z Als er ruimte is voor lastenverlichting, welke variant is dan het meest gunstig voor de arbeidsmarkt? Met de nieuwe versie van MIMIC heeft het Centraal Planbureau dit doorgerekend. Een belastingkorting voor laagbetaalde werknemers blijkt het meest effectief. http://repub.eur.nl/res/pub/1956/ 1998-01-01T00:00:00Z The tax reform proposals by the Dutch government include several shifts in the tax structure and a cut in the overall tax burden. This paper argues that these reform proposals reduce the unemployment rate only if the gap between wage incomes and unemployment benefits increases and the overall tax burden drops. Targeting the tax reduction to the unskilled seems the most effective way to cut unemployment. However, such targeted measures raise the marginal tax on other incomes, thereby harming the quantity and quality of labor supply. http://repub.eur.nl/res/pub/1958/ 1998-01-01T00:00:00Z MIMIC is CPB’s applied general equilibrium model for the Dutch economy. The model is designed to help Dutch policymakers investigate the structural labormarket implications of changes in the systems of taxation and social insurance. MIMIC combines a rich theoretical framework based on modern economic theories, a firm empirical foundation, and an elaborate description of the actual tax and social insurance systems in the Netherlands. The theoretical foundation of the model implies that one can interpret the model results rather easily in terms of rational microeconomic behavior, despite the disaggregated nature of the model and its rich institutional detail. This institutional detail makes the model especially relevant for policymaking.