Important legal notice
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Economic development and cohesion
Economic development and cohesion - Banding together for prosperity
“Enabling policy-makers to offer firms and workers better incentives while preserving societal cohesion in the EU.”

The problem

As policy-makers strive to boost the European economy and to reduce socio-economic disparities between countries of the recently enlarged European Union, an opportunity has arisen to compare the tax-benefit systems of the various Member States and to examine how they support or hinder these efforts. In-depth analysis of the underlying mechanisms may suggest ways to harmonise these systems within the EU so as to maximise desirable impacts. A focus on growth, employment, sustainability, and processes linked to Union building would also contribute to such an analysis.

TAXBEN  Tax-benefit systems for growth and employment


Using a variety of models and analytical approaches (a computable general equilibrium model, a gravity model, heterogeneous panel data models, econometric analysis, etc.), the TAXBEN partners will focus on:

  • links between tax-benefit systems and employment
    in the EU
  • EU tax systems under tax competition and enlargement
  • Tax-benefit systems in relation to the growth potential of the Union
  • the macroeconomic role of national tax systems in promoting tax reforms under the single monetary policy
  • achieving sustainable and environmentally friendly growth in the EU
  • the role of green taxes and emissions trading in the energy sector

Contribution to policy development:

  • TAXBEN will support the Lisbon process by exploring the links between tax/benefit systems and “a dynamic, sustainable (...) economy enjoying full employment and strengthened economic and social cohesion”
  • The work will contribute to employment policy by highlighting tax/benefit reforms likely to enhance employment
  • The project will help to build a knowledge base in support of tax harmonisation in the euro area and the enlarged Union

Project deliverables

  • Tax benefits, labour markets, and employment policy: workshop; three working papers
  • Tax-benefit systems under tax competition: workshop; three working papers
  • Tax-benefit systems and growth potential: workshop; two working papers
  • The macroeconomics of tax systems under the single monetary policy: workshop;
    four working papers
  • Green taxes and sustainable development: workshop; five working papers


  • A project web page, to be hosted on the website of the European Network of Economic Policy Research Institutes (ENEPRI – – ongoing
  • Scientific publications and presentations – ongoing
  • Reporting on project activities in the ENEPRI newsletter – ongoing
  • Final report and conference for EU policy-makers – Month 22

Technical information

Project acronym: TAXBEN
Project’s official full title: Tax/benefit systems and growth potential of the EU
Research priority: 3.1. Impacts of tax/benefit levels for the pursuit of sustainable development, employment, pensions, social cohesion
Specific webpage: Not yet available
Proposal/contract no: 502639
Start date: 01/12/2004
Kick off meeting: 21/01/2005
Completion date: 30/11/2006
European Commission scientific officer: Ian Perry (

Name: Daniel Gros, Centre for European Policy Studies
Abbreviated name: CEPS
Address: Place du Congrès, 1
B-1000 Brussels
Country: Belgium
Tel: +32 2 229 3911
Fax: +32 2 219 4151


Name: The Research Institute of the Finnish Economy
Abbreviated name: ETLA
Country: Finland 

Name: Centre d’Etudes Prospectives et d’Informations Internationales
Abbreviated name: CEPII
Country: France 

Name: Centre d’Etudes Prospectives d’Economie Mathématique
Abbreviated name: CEPREMAP
Country: France 

Name: Netherlands Bureau for Economic Policy Analysis
Abbreviated name: CPB
Country: The Netherlands

Name: Konjunkturinstitutet
Abbreviated name: NIER
Country: Sweden

Name: Centre for Policy Studies
Abbreviated name: PRAXIS
Country: Estonia