Even before the financial crisis of 2008–2009 many developed economies were struggling to maintain employment and earnings. These problems become even more severe as populations age. The key to extending employment and earnings is to focus policy on improving the flows into work for people leaving school and for mothers with young children, and on expanding work among people in their 50s and 60s. These are the margins where labor supply is most sensitive to tax incentives, and a policy redesign can enhance earnings throughout the working life.
Authors
![Richard Blundell](/sites/default/files/styles/square_desktop/public/2024-03/Richard%20Blundell%20Head.jpg?itok=ow7e9OkA)
CPP Co-Director
Richard is Co-Director of the Centre for the Microeconomic Analysis of Public Policy (CPP) and Senior Research Fellow at IFS.
Report details
- Publisher
- IZA
Suggested citation
Blundell, R. (2014). How responsive is the labor market to tax policy?. Bonn: IZA. Available at: https://ifs.org.uk/publications/how-responsive-labor-market-tax-policy (accessed: 18 June 2024).
Related documents
More from IFS
Understand this issue
![Kier Starmer](/sites/default/files/styles/square_desktop/public/2024-06/Lab1.jpg?itok=43eIsvgM)
Election Special: The Labour manifesto explained
14 June 2024
![Sunak](/sites/default/files/styles/square_desktop/public/2024-06/Sa.jpg?itok=fSe9wEea)
Election Special: The Conservative manifesto explained
12 June 2024
![Paul Johnson](/sites/default/files/styles/square_desktop/public/2024-06/Paul-Johnson_1.jpg?itok=faO4zKnw)
The Labour manifesto
13 June 2024
Policy analysis
![Kier Starmer](/sites/default/files/styles/square_desktop/public/2024-06/Kier-Starmer-.jpg?itok=BSz-So7j)
Labour Party manifesto: an initial response
13 June 2024
![Mother with sons](/sites/default/files/styles/square_desktop/public/2024-06/Mother-with-sons.jpg?itok=YhJmjOrZ)
The two-child limit: poverty, incentives and cost
17 June 2024
![rhun-ap-iorwerth](/sites/default/files/styles/square_desktop/public/2024-06/rhun-ap-iorwerth-.jpg?itok=gOFUozKS)
Plaid Cymru manifesto: a response
13 June 2024
Academic research
![Working Paper Cover](/sites/default/files/styles/portrait/public/2024-04/WP202413-Labour-market-inequality-and-the-changing-life-cycle-profile-of-male-and-female-wages_Page_001.jpg?itok=FGFp0iFj)
Labour market inequality and the changing life cycle profile of male and female wages
15 April 2024
![Working Paper Cover](/sites/default/files/styles/portrait/public/2024-04/WP202414-Interpreting-cohort-profiles-of-lifecycle-earnings-volatility_Page_01.jpg?itok=PhiPLJpT)
Interpreting cohort profiles of lifecycle earnings volatility
15 April 2024
![Working paper cover](/sites/default/files/styles/portrait/public/2024-04/WP202410-There-and-back-again-womens-marginal-commuting-costs.jpg?itok=DWZwJzbm)
There and back again: women’s marginal commuting costs
2 April 2024