Table 7: Impact of a 10% permanent and temporary reduction in earned income taxes for workers aged 60 and over with a lower intratemporal elasticity of substitution key macroeconomic indicators*.

Macroeconomic indicatorsPermanentTemporary
201020302050201020302050

Real GDP per capita 0.05 (−0.03)0.05 (0.00)0.05 (−0.05) 0.08 (0.00)0.17 (−0.03)0.08 (0.01)
Labour supply/capita0.10 (−0.03)0.17 (−0.01)0.25 (−0.05)0.13 (0.01)0.22 (−0.02)0.06 (0.01)
National savings−0.27 (0.02)−0.15 (−0.01)−0.24 (0.01)−0.20 (0.01)0.36 (0.15)0.18 (0.03)
Capital stock/capita−0.06 (−0.01)−0.30 (0.02)−0.55 (−0.08)−0.03 (0.00)0.00 (−0.08)0.14 (−0.02)
Capital/labour ratio−0.16 (0.03)−0.54 (0.03)−0.95 (−0.02)−0.17 (−0.01)−0.29 (−0.08)0.08 (−0.03)
Real wages−0.05 (0.00)−0.14 (0.01)−0.24 (0.00)−0.05 (0.00)−0.08 (−0.02)0.02 (−0.01)
Earned income tax rate−0.14 (−0.01)−0.14 (−0.01)−0.13 (0.00)−0.15 (−0.02)−0.16 (−0.01)−0.01 (0.00)

*Percentage point difference against the reference scenario. Values in brackets are differences compared with the first scenario. See Tables 3 and 5. The substitution elasticity between consumption and leisure in the general equilibrium model is reduced from 0.8 to 0.6.