Structural Change in the Scottish Labour Market, the Tax Take and the New Parliament's Income Tax-varying Powers

This article examines the implications of increased labour market flexibility, in the form, of part-time work, for the Scottish public finances in the context of devolution and the establishment of a Scottish Parliament with income ta varying powers. The income tax contributions of different Scottish household types are calculated using a spreadsheet-based model. The findings show that any trend towards part-time, rather than full-time, employment could seriously erode the country's total income tax take and reduce the effectiveness of the tax-varying powers to provide a source of additional revenue for the Scottish Parliament.