We calibrate the model to the U.S. data and numerically characterize transition paths from the current tax system to a reformed system. All our experiments are revenue-neutral. Starting from the current tax code, we allow for transitions to reformed steady-states in which the capital income...

We study a calibrated stochastic life cycle model and its implications for changes in the volatility of hours worked over the life cycle. In particular, we contribute to the literature to which Rios-Rull (ReStud, 1996) and Gomme, Rogerson, Rupert and Wright (NBER Macro Annual, 2004) are notable...