The paper presents a large scale overlapping generation model with
heterogeneous agents, where the family is the decision unit. We
calibrate the model for three European countries – France, Italy and
Sweden – which show marked differences in the design of some public
programs. We examine the properties in terms of annual and lifetime
redistribution of a number of tax-benefit programs, by studying the
impact of removing from our model economies some or all of them.
We find that whether one considers a life-cycle or an annual horizon,
and whether behavioral responses are accounted for or not, has a large
impact on the results. The model may provide useful insights for pol-
icy makers on which kind of reforms are more likely to achieve specific equity objectives.