Taxation and employability in MIMIC

CPB’s applied general equilibrium model for the Dutch economy, MIMIC, has recently been extended to include the effects of taxation on training incentives. This paper elaborates on the training model. Furthermore, it illustrates how the extension with a training model affects the simulation results of MIMIC. I find that the incorporation of a training model has important implications for the quality of the labour supply, especially in tax experiments that substantially affect the marginal tax burden.