What Are the Economic and Labour Market Effects of an Income Tax Reduction Targeted at Older Workers?

Table 1

Economic impact of a rise in the retirement age (summary of studies).

Authors	Approach/Country	Indicator	Summary of results
Hviding and Mérette [10]	CGE model/7 OECD countries	GDP per capita	4-year increase in retirement age: increase of 7% by 2050 for Canada and 5.7% in the US
Herbertson and Orszag [9]	Accounting/OECD	GDP	In 1998, 6.3% increase on average in OECD
Rowe and Nguyen [13]	Microsimulation model (Lifepaths)/Canada	Forgone earnings	Retirement is delayed to age 65: $72,000/household with normal job loss probability
Verma and Rix [14]	Macroeconometric model of US	GDP	LF part. rate of 65+ returns to 1950: 10% increase by 2029
Policy Research Initiative [15]	Microsimulation model (Lifepaths)/Canada	Avg. annual hours per person	3-year extension of working life: 6% increase in hours by 2025
Fougère et al. [11]	CGE model/ Canada	GDP per capita	1-year permanent increase in effective age of retirement: 3.2% increase in GDP per capita by 2050
Barrell et al. [12]	Macroeconometric model (NiGEM)/UK	GDP	1-year permanent increase in effective age of retirement: 1% increase in GDP after 6 years