Wage and age related employers’ SSC cuts and wage subsidies in the 2007 vintage of HERMES [Working Paper 12-07]

The distinction between the young and the elderly within low and high wage earning employment in HERMES, the FPB's medium-term macroeconomic model, enables the assessment of both age and wage related labour cost reducing policies. The age structure of salaried employment in each branch of activity is embedded in a three-stage mechanism. First, aggregate demand and the relative cost of labour to capital determine salaried employment. Next, relative wages allocate employment among three major labour categories: low-paid jobs, high-paid jobs and special-employment programmes. Finally, within each labour category relative wages allocate employment between the young (aged less than fifty) and the elderly (aged fifty or more).

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Peter Stockman (A)
A : Auteur, C : Contributeur



  Type de publication

Planning & Working Papers

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