Tax policy targeting age groups boosts labor supply and capital growth.
Workers with more flexible work schedules should have lower taxes, according to a study. Older workers are more likely to change their work hours based on pay compared to younger workers. The government can use age and savings to estimate how flexible workers are. The best tax policy lowers taxes for older workers with savings, raises taxes for middle-aged workers, and helps young workers with less money. This policy boosts overall work and savings, leading to small improvements in people's well-being.